UK House Prices Feel the Pinch of Rising Mortgage Costs

The UK housing market is feeling the strain of rising mortgage costs, with house prices falling at their sharpest pace in eight months. According to the Nationwide Building Society, the cost of mortgages has increased, making it difficult for people to afford to buy a property. This has led to a stagnation in the housing market, with prices falling 0.4% in April.

The UK housing market is feeling the strain of rising mortgage costs.

The average cost of a home in the UK is now £261,962, which is about 4% below the peak in the summer of 2022. Home prices have stagnated over the past year, with a mere 0.6% increase. This is much less than the 1.2% gain economists had expected.

“Though mortgage affordability is much better than it was last summer, it remains very stretched relative to historical norms,” said Peter Arnold, chief economist at EY UK. “A strong recovery is unlikely.”

The slowdown in the housing market is likely due to ongoing affordability pressures, with longer-term interest rates rising in recent months. This has reversed the steep fall seen around the turn of the year.

Mortgage affordability remains stretched relative to historical norms.

Research by Nationwide and Censuswide found that almost half of prospective first-time buyers looking to secure a home in the next five years have delayed their plans. The most commonly cited reason for delaying their purchase is that house prices are too high (53%), but it is also notable that 41% said that higher mortgage costs were preventing them from buying.

Many first-time buyers are delaying their purchase due to high house prices and mortgage costs.

Another 55% of people said they would be willing to buy in a cheaper area of the country or where they could get a bigger property - with half willing to move more than 50 kilometers away.

Many are willing to consider buying in a cheaper area or a bigger property.

The UK housing market is facing a challenging time, with rising mortgage costs and stagnant prices. It remains to be seen how the market will recover, but for now, it seems that the cost of living pressures are taking their toll on the housing market.

The UK housing market is facing a challenging time.