- Between January and August, the average UK house price increased by almost £20,000, from £255,556 to £273,751.
- A 10% deposit on the typical mortgage on a first-time buyer property increased to almost 60% of annual gross earnings – an all-time high.
- Increasing mortgage rates in the aftermath of the mini-budget pushed up mortgage payments and affected market confidence.
- According to Nationwide, house prices saw three successive monthly declines since September – the worst run since 2008.
- However, there are hopes for a relatively soft landing with price declines of around 5%.
Nationwide has released a housing market review as well as a forecast for 2023.
Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown:
“Today’s data shows the remarkable resilience of the UK housing market for much of the year with strong house price growth and activity continuing even in the face of growing economic headwinds. Many wondered how long this could continue and the end when it came, came abruptly. The aftermath of the mini-budget brought the market to a screeching halt with providers pulling deals off the table and mortgage payments heading skyward.
It has truly shaken confidence, with would-be buyers now increasingly hesitant to come to market – a fact confirmed by recent data from the Building Societies Association (BSA) showing housing market sentiment close to all-time lows.
As the economic gloom darkens with impending recession it’s unlikely we will see people rushing back into the market in their droves any time soon – again the BSA data showed even higher earning households increasingly worried about their bills and affordability of mortgage payments is seen as the main barrier to property purchase – even more so than saving increasingly huge deposits.
However, there still seems to be hope for something of a soft landing as we head into the New Year. The expectation is that the recession will not result in mass redundancies and that fixed rate mortgage deal rates may have peaked. With luck this can tempt people back into the market and support activity with prices edging down modestly rather than any kind of crash. This should come as some comfort after what has been a truly terrible year for many.”