The property market has been going from strength to strength over the last year, pushing house prices up. However, homebuyers will be pleased to hear there has been a slowdown in the rate of growth lately.
According to the latest Halifax House Price Index, property values rose by 0.3 per cent in January, which is the lowest rate since June last year.
Russell Galley, managing director at Halifax, stated this is the first time in five months price growth has not exceeded one per cent.
The subdued increase could be a reflection of low affordability levels, with house prices still rising faster than earnings.
“Despite record levels of first-time buyers stepping onto the ladder last year, younger generations still face significant barriers to home ownership as deposit requirements remain challenging,” Mr Galley stated.
The property expert predicted the problem to worsen over the year, due to increasing household budgets, meaning property buyers will not be able to save as much money for their move.
Mr Galley went on to say the limited supply of new houses will continue to push values up, but “it remains likely the rate of house price growth will slow considerably over the next year”.
The financial services provider’s latest report revealed property values increased by 9.7 per cent over the past 12 months, taking average prices to £279,759. In January last year, they were more than £25,000 cheaper at £252,229, meaning homebuyers who have not managed to get on the property ladder over the last year now need to borrow a lot more money to be able to do so.
This reflects recent findings from Nationwide, which revealed a 20 per cent deposit on an average home in the UK is the equivalent to 110 per cent of a typical income.
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