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House price growth remains stable

House price growth remains stable

Category: Mortgages

Updated: 07/06/2016
First Published: 07/06/2016

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

If you're concerned about the ongoing march of house prices, we have a bit of good news – prices are still rising, but the pace of growth remains unchanged from last month, with figures from Halifax showing tentative signs of market stabilisation.

The figures show that prices in the three months to May were 9.2% higher than in the same three months a year earlier, unchanged from April's rate of growth and the joint-lowest figure seen since November, and still well below the peaks seen at the height of the recovery. On a quarterly basis prices were 1.4% higher – a slightly slower growth rate than the 1.5% recorded in April and again the lowest seen since November – while on a monthly basis they rose by 0.6%.

This means that the price of a typical home in the UK now clocks in at an average of £213,472, only marginally above that of April and happily still below the record of £213,945 set in March (prices fell by 0.8% the following month).

This suggests that strong demand for housing is still apparent – an issue compounded by an ongoing lack of supply, with figures from Rics showing that new instructions by home sellers fell for the second consecutive month in April – but from the looks of things, we might have left the truly excessive rates of annual growth behind for the time being.

"Low interest rates, increasing employment and rising real earnings continue to support housing demand," explained Halifax's housing economist Richard Gardner. "The strength of demand, combined with very low supply, is causing house prices to rise at a brisk pace in quarterly and annual terms.

"[However] increasing affordability issues, caused by a sustained period of higher-than-earnings house price growth, should curb housing demand and result in some slowdown in house price growth as the year progresses."

This means that prices shouldn't be rising too excessively in the months ahead, which will come as welcome news to those trying to get on the housing ladder. Saving up a deposit can be difficult enough without the goalposts continually moving, so if you're looking to make that all-important move, you're picking a great time!

All the signs point to it being a golden age for first-time buyers, with typical mortgage rates among the lowest ever recorded and first-time buyer sales at an almost two-year high, and with the pace of house price growth stabilising, it should be easier to determine the amount of deposit you'll need to save, as well as the kind of mortgage you'll need to accompany it. Want to get an idea? Check out the top first-time buyer mortgages to get started, and see if you can take advantage of the housing market.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.