The UK #housingmarket is currently experiencing a slowdown, with #propertyprices falling for the fifth consecutive month in January 2023. This trend can be attributed to a combination of factors including #inflation, rising cost of living, and increased #mortgage costs. According to Nationwide, one of the country's leading mortgage lenders, the average house price in January was £258,297, down 0.6% from December.
The slowdown in house #pricegrowth has impacted all regions across the UK, with some areas experiencing a sharper downturn than others. East Anglia was the hardest hit, with house price growth slowing to 6.6% in the three months to December, down from 11.2% in the previous quarter. Meanwhile, Scotland has been the least affected, with growth at 3.3%, down from a previous quarter of 7.8%.
The annual house price growth rate has also slowed to 1.1% in January, which is the lowest since June 2020. Nationwide's Chief Economist, Robert Gardner, stated that it will be difficult for the market to gain momentum in the near term as economic conditions are expected to remain challenging.
Borrowers are likely to feel the impact of the recent #interestrate hike by the Bank of England, which increased rates from 3.5% to 4%. According to UK Finance, the average tracker #mortgagepayment will increase by £48.99 per month, and the average standard variable rate (SVR) mortgage will increase by £30.81 per month.
Gardner noted that reductions in mortgage rates and income growth could help improve the affordability situation for potential buyers, but the overall affordability situation is expected to remain challenging in the near term. With 1.8 million fixed-rate mortgage customers due to see their deals end this year, the market is expected to remain sluggish in the coming months.
What does this mean for #investors who are waiting for a bottom in the UK #propertymarket before they buy. This may well be an indication it's very much closer than the horizon. Many property market experts both at the high economic level but also at the ground level, say Q2 2023 is the likely window of opportunity. At mid-Q1, this seems a more than reasonable prediction.
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