Whether you’re reaching a new rung on the property ladder, seriously thinking of selling, or just like to pass time looking at dream homes on Rightmove (guilty), the price of property has never been a more popular topic.
And according to Nationwide Building Society, there’s plenty to talk about, as the average house price in the UK has shot up to a new record high.
Across the nation, a new home will now set you back an estimated £217,010 – that’s a lift of 2.5 per cent year on year, and 0.6 per cent month on month.
‘Nonetheless, annual house price growth remains within the fairly narrow range of c2-3 per cent which has prevailed over the past 12 months, suggesting little change in the balance between demand and supply in the market,’ Robert Gardner, Nationwide’s Chief Economist, commented on the figures.
‘Looking further ahead, much will depend on how broader economic conditions evolve, especially in the labour market, but also with respect to interest rates.’
Overall, Nationwide estimates that house prices are likely to grow by around 1 per cent over the course of 2018.
Their report also addressed the possibility of the Bank of England increasing interest rates at their next meeting, which takes place on 2nd August – and the impact this will have on the country’s mortgages overall.
‘Most economists and investors expect the Bank Rate to be increased from 0.5% to 0.75%,’ Robert noted.
‘Providing the economy does not weaken further, the impact of a further small rise in interest rates on UK households is likely to be modest,’ he continued, explaining that most lending is fixed and likely to be unaffected.
However, he added that despite the modest changes, the pressure on household budgets should not be underestimated.
‘Wages have not been rising as fast as the cost of living. Indeed, in real terms (i.e. after adjusting for inflation) wage rates are still at levels prevailing in 2005,’ he concluded.
‘Moreover, a small proportion of households already have a relatively high debt service burden. For example, the English Housing Survey suggests that around 12% of homeowners already spend over 30% of their gross income on their mortgage each month. And, for those, some of whom will be on variable rates, any rate rise will be a struggle, even though the impact on the wider economy and most households is likely to be modest.’