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Robert Gardner, Nationwide’s chief economist, says annual house price growth was “broadly stable” at -3.5% in June, little changed from the 3.4% decline recorded in May.
Prices were also fairly stable over the month, rising by a modest 0.1%, after taking account of seasonal effects, reversing the 0.1% decline seen in May.
“The sharp increase in borrowing costs is likely to exert a significant drag on housing market activity in the near term.
For example, for a representative first-time buyer earning the average wage and buying the typical property with a 20% deposit, mortgage payments as a share of take-home pay are now well above the long-run average, as illustrated in the chart below.
A 10% deposit on a typical first-time buyer home is equal to around 55% of gross annual income – this is down from the all-time highs of 59% prevailing in late 2022, but still marginally above the levels prevailing before the financial crisis struck in 2007/8.
