- Average house prices rose just 1.8% in the year to July – down from 2.2% a month earlier (source: House price growth remained subdued in July | Nationwide)
- They were up 0.1% in a month to £277,542
- Housing market struggles against backdrop of uncertainty
Sarah Coles, head of personal finance at AJ Bell, comments:
“When you’re about to take a leap of faith into the property market, you’d like some confidence you’re landing on solid ground. Unfortunately, geopolitical turmoil, sluggish economic growth, low consumer confidence, concerns about the jobs market, and uncertainty around new political leadership, are all making the market feel decidedly shaky. It’s no wonder that buyer demand is weak and house price growth is slow.
“Separate Rightmove figures show that the monthly figures for the time property remains on the market has risen to just over 68 days, and RICS data shows that buyer numbers remain low.
"Affordability is weighing on the market too. It’s one reason why there’s such a North/South divide, and why property prices in the expensive South East have been struggling so much.
"The fact that house prices are growing so much more slowly than wages means affordability is improving on one level – with the house price to earnings ratio below the 25-year average. It’s currently around 5.5 – compared to the post-pandemic boom when it was closer to 7. However, this does nothing to negate the fact that mortgage payments remain a huge challenge, especially now that rates have started to rise again.
"The struggle that sellers are currently facing should be food for thought for anyone factoring property into their retirement plans. If you’re planning to downsize or sell an investment property to help fund retirement, it shows that you may have to put your plans on hold while your property sits around unsold. Depending on when you come to sell, you might also make less from your property than you’d hoped. It’s why even when property is part of your retirement income plans, this should sit alongside sensible pension contributions to provide a reliable income stream.”
