UK property prices recorded a relatively sharp decline as they fell 3.5% from last year, with reports saying the sharp increase in borrowing costs is likely to have more significant impact on the market real estate.
According to the latest data published by Britain’s Nationwide Bank and published by Al Arabiya Net, the average UK house price reached £262,239 this June, down 3.5% from where prices were at the beginning of June. the same June last year.
London recorded the second biggest year-on-year decline, with property prices falling 4.3%, but average prices in the capital are still much higher than the rest of the country.
Compared to June last year, UK house prices fell 3.5%, almost unchanged from a 3.4% decline the previous month.
Nationwide Chief Economist Robert Gardner said: “Long-term interest rates, which underlie mortgage pricing, have risen sharply in recent months in response to data indicating that core inflation in the UK economy is not declining as quickly as expected.”
A Nationwide report says that a typical first-time home buyer’s 10 percent deposit represents about 55% of total annual income.
She added that although this is below the high of 59% that prevailed at the end of 2022, it is slightly higher than the levels that existed before the financial crisis that the world saw in 2008.
“Furthermore, despite higher interest rates available to savers, skyrocketing rents combined with generally still high inflation continue to discourage many potential buyers from saving deposits,” Gardner added.
For people exiting two-year fixed-rate mortgage deals, the new two-year deal could mean an increase of £385 per month for the average borrower.
He said those exiting five-year deals faced an increase equivalent to around £315 a month for a typical mortgage borrower.
