Nationwide: House price growth continues to slow

Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, comments on publication of the Nationwide House Price Index for January 2023, showing house price growth continues to slow.

Key points from publication:
    • Annual house price growth slowed to 1.1%, from 2.8% in December.
    • Average house price is £258,297. This is down from £262,068 in December and 3.2% below August’s peak (£273,751).
    • Follows Bank of England data yesterday showing mortgage approvals continue to dip.
    • The building society says there are signs mortgage rates are normalising after spiking in the aftermath of the mini-Budget.
    • London continues to have the highest house price to earnings ratio at 9.2. Scotland and the North region have the lowest house price to earnings ratios at 3.4.
Helen Morrissey says:

“The housing market continues to slow with annual house price growth now standing at just 1.1%. The heady days of the pandemic race for space feel like a lifetime away and it won’t be long until we see house price growth going backwards.

“It’s been a truly turbulent year for homeowners and would-be buyers as the cost-of-living crisis pushed our finances to their limit meaning many people had to put off the prospect of buying because they just couldn’t afford it.

“Added to this the aftermath of the mini-Budget pushed mortgage rates skyward causing many would-be buyers to back away from the market.

“There are signs mortgage rates are starting to come down but it’s going to take a lot to tempt people back into the market and Bank of England data published yesterday showed mortgage approvals continuing to fall.

“Looking ahead it’s hard to see anything changing for the better any time soon.

“Budgets are still squeezed putting a brake on people trying to save a deposit that already takes years to build. The data shows someone in London wanting to save a 20% deposit could be saving for 15 years or more.

“Predictions of house price falls this year will also prompt would-be buyers and sellers to hold off on a purchase until the outlook looks a bit clearer.

“Added to this the prospect of a recession continues to loom large with the chance of potential job cuts putting people off taking the plunge and going after that dream property.”

 

Kindly shared by Hargreaves Lansdown

Main article photo courtesy of Pixabay