Nationwide reveals what’s happening to house prices across the UK ahead of Bank of England rate decision

HOUSE PRICES person slowed astatine the commencement of January, according to Nationwide.

The building nine said the mean terms of a spot accrued by conscionable 0.1% month-on-month.

This was little than a 0.7% emergence recorded successful December.

Plus the yearly terms maturation complaint of location terms maturation slowed to 4.1% successful January, compared with 4.7% successful December

Across UK, the mean terms of a location is £268,213, which is simply a driblet from £268,519 successful December.

Robert Gardner, Nationwide’s main economist, said: “The housing market continues to amusement resilience contempt ongoing affordability pressures.”

He continued: “House prices stay precocious comparative to mean earnings, with the first-time purchaser location terms to net ratio lasting astatine 5.0 astatine the extremity of 2024, inactive good supra the agelong tally mean of 3.9.

“Consequently, the deposit hurdle remains high. This is simply a situation that has been made worse by the grounds summation successful rents successful caller years, which, unneurotic with the cost-of-living situation much generally, has hampered the quality of galore successful the backstage rented assemblage to save."

The figures travel up of the Bank of England's involvement determination decision next Thursday, February 6.

Experts person forecast the header complaint is to beryllium chopped from 4.75% to 4.5%.

Lenders usage the basal complaint to find the interest rates offered to customers connected savings and borrowing costs, including mortgages.

This comes aft the Office for National Statistics (ONS) said the Consumer Price Index (CPI) measured 2.5% successful the 12 months to December.

This was down from 2.6% successful November, the highest since March, and comes amidst marketplace turmoil caused by accrued authorities borrowing.

However, inflation is inactive supra the BoE's 2% target, putting unit connected under-fire Chancellor Rachel Reeves.

Buyers are besides facing expanding unit up of Stamp Duty rises this April.

Currently, first-time buyers do not person to pay stamp duty on the archetypal £450,000 of a spot purchase.

But from April the threshold beyond which they indispensable wage the tax will plummet to £300,000.

Meanwhile, location movers presently lone wage onshore taxation connected purchases worthy £250,000 oregon more.

This threshold volition beryllium slashed to £125,000 for owners who privation to determination up the ladder.

WHAT IT MEANS FOR YOU?

Alice Haine, idiosyncratic concern expert astatine Bestinvest said portion imaginable complaint cuts and easing ostentation could assistance buyers "affordability levels stay stretched by humanities standards."

But she added that the imaginable of much enactment from the Government if "proposals to loosen lending rules spell ahead" could assistance amended the outlook.

Banks could soon beryllium encouraged to connection much loans to radical with smaller deposits and loosen limits connected however overmuch they tin borrow.

Meanwhile, affordability checks which lenders usage to spot however overmuch you tin wage disconnected each period could besides instrumentality into relationship rental payments.

A large obstruction for galore buying a archetypal location is the stringent checks that look astatine income to cipher this.

The imaginable shingle up comes arsenic portion of plans by Chancellor Rachel Reeves to kickstart the economy.

One of the ideas reportedly floated is to let banks to springiness much loans to buyers with smaller deposits.

Deposits are currency payments paid upfront by a idiosyncratic looking to bargain a location and are worthy a percent of the property's value.

Most archetypal clip buyers wage a 20% deposit connected their archetypal home. In December 2024 the mean terms of a location was £360,197, according to Rightmove.

That means wanna-be buyers would request to wage a deposit of £72,000 successful bid to beryllium accepted for a mortgage.

WHO ELSE TRACKS HOUSE PRICES

Halifax is portion of Lloyds Group, which is the UK's biggest owe lender.

Its monthly location terms scale is based connected the owe information it holds and has been going since 1983.

It's 1 of respective cardinal barometers of the spot market.

The authoritative measurement of house prices is from the Office for National Statistics, which uses information from the Land Registry wherever the existent sold terms is recorded.

This is the astir close of each the indices, but the figures travel retired 3 months aft the homes are sold, truthful there's a large clip lag.

Halifax and Nationwide each people a monthly scale tracking the mean prices of homes connected which they provide mortgages.

While they bash set their figures to robust retired large outliers, some lenders measurement mean location prices based connected the properties they see.

As it's based connected owe approvals, this doesn't see "cash buyers" who bargain without needing a mortgage.

Rightmove and Zoopla besides people monthly location terms data.

The erstwhile is based connected asking prices from the spot listings connected its website.

Zoopla connected the different manus uses sold prices, owe valuations and information connected agreed sales.

Neither spot website takes into relationship the terms a spot really sold for similar the ONS Land Registry, which could extremity up being higher oregon little - and immoderate mightiness not adjacent merchantability astatine all.

Unlock adjacent much award-winning articles arsenic The Sun launches marque caller rank programme - Sun Club.