Nationwide says housing market is resilient despite affordability pressures

The yearly complaint of location terms maturation slowed to 4.1% successful January, from 4.7% successful December, according to Nationwide Building Society.

House terms maturation showed signs of slowing astatine the opening of 2025, according to an index.

The yearly complaint of location terms maturation decreased to 4.1% successful January, down from 4.7% successful December, arsenic reported by Nationwide Building Society. On a monthly basis, house prices crossed the UK accrued by 0.1%, which was little than the 0.7% emergence recorded successful December.

The mean UK location terms successful January stood astatine £268,213. Robert Gardner, Nationwide's main economist, stated: "The lodging marketplace 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."

Gardner highlighted the challenges faced by first-time buyers, saying: "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."

He added that it's not astonishing that galore first-time buyers trust connected assistance from friends and household to rise a deposit, citing that successful 2023/24, astir 40% of first-time buyers received assistance successful the signifier of a gift, loan, oregon inheritance to unafraid a deposit. Despite galore obstacles, location ownership successful the UK has remained notably unchangeable successful caller times.

According to the latest English Housing Survey by the Ministry of Housing, Communities and Local Government (MHCLG), the complaint of location ownership successful 2024 held dependable astatine 65%. However, ownership rates among younger demographics, particularly those aged 25 to 34 and 35 to 44, are inactive importantly little than their 2004 highs.

Sarah Coles, caput of idiosyncratic concern astatine Hargreaves Lansdown, said: "Prices are inactive nether unit from buyers trying to clamber done the stamp work vacation window, earlier it slams unopen astatine the extremity of March."

In airy of impending stamp work changes successful April, Iain McKenzie, main enforcement of the Guild of Property Professionals, observed: "Momentum built up towards the extremity of past twelvemonth has carried implicit into 2025, with marketplace enactment bolstered by a unreserved to implicit transactions up of the impending stamp work changes successful April."

Nathan Emerson, main enforcement of spot professionals’ assemblage Propertymark, added: "Currently, it’s apt a batch of question successful the marketplace is owed to radical wanting to propulsion done with their purchases and income earlier the stamp work rises successful England and Northern Ireland successful April."

After April 1, the "nil rate" stamp work set for first-time buyers successful England and Northern Ireland volition alteration from £425,000 to £300,000. Tom Bill, caput of UK residential probe astatine Knight Frank, said: "Higher borrowing costs are weighing connected buyers but request inactive feels artificially strong.

“Sub-4% owe offers that pre-date the Budget and an April emergence successful stamp work means request successful the archetypal 4th of the twelvemonth is apt to beryllium much robust than successful the second.”

Alice Haine, idiosyncratic concern expert astatine Bestinvest by Evelyn Partners, said: "For buyers looking to unafraid the champion woody they can, the rapidly evolving marketplace situation tin beryllium challenging.

"First-time buyers wanting to flight sky-high rents whitethorn beryllium anxious to instrumentality vantage of somewhat amended disposable incomes and the existent stamp work thresholds. But with conscionable 2 months until the stamp work changes instrumentality effect, those that haven’t started the process already whitethorn person already near it excessively precocious to hold and implicit a acquisition successful time."

Jeremy Leaf, an property cause from northbound London, doesn't spot a displacement successful affordability issues anytime soon: "Affordability concerns person ne'er gone away. The marketplace remains choky and small alteration is expected implicit the adjacent fewer months astatine least, irrespective of immoderate imaginable involvement complaint reductions."

Matt Thompson, Head of Sales astatine Chestertons, a London property agency, said that the spot marketplace experienced a surge successful first-time purchaser involvement successful January: "In January, the spot marketplace saw peculiarly precocious request from first-time buyers who were motivated to bushed April’s stamp work deadline. This spike successful purchaser enactment led to the bulk of properties speech hands for the asking terms though immoderate sellers, particularly those successful a unreserved to sell, agreed to participate terms negotiations."