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House prices continue to moderate

House prices continue to moderate

Category: Mortgages

Updated: 30/01/2015
First Published: 30/01/2015

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 It is now over 6 months old so the content may be out of date.

Latest figures on the UK housing market have revealed that moderation is still the watchword in the New Year, with annual house prices continuing to stabilise after flattening out towards the end of 2014.

According to the Nationwide House Price Index, annual house price growth slowed in January 2015 to 6.8%, a notable drop from the 7.2% year-on-year growth recorded in December. The research also revealed that house prices only crept up by a minute 0.3% in January, marking the fifth consecutive month where house price growth has slowed, putting the average house price in the UK at £188,446.

Why the slowdown?

This drop in the speed of house price rises is not all that unsurprising given the recent dampening of activity in the housing market. The number of mortgages approved for house purchases are currently down 20% on this time last year, while surveyors have also reported a drop-off in home buyer enquiries.

However, the reasons behind this decline are still unclear. Unemployment levels have been dropping while wage growth has finally started to out-strip the cost of living. The present low rates for mortgages and the recent changes to the
cost of stamp duty

should also have helped to revive the interest of buyers, but so far this has failed to happen.

Economists are remaining positive, however, and predict that housing activity will pick up again as the year progresses. "If the economic backdrop continues to improve as we and most forecasters expect, activity in the housing market is likely to regain momentum in the months ahead," commented Robert Gardner, Nationwide's chief economist.

Time to buy?

The housing market as a whole may be quiet, but that doesn't mean you can't take the plunge and buy that dream home. Now is a great time to start looking around as, thanks to record low mortgage rates and the new stamp duty rules, buying a home could be well within your grasp.

If you're ready to take a step onto the housing ladder, or you want to move up, you will need a mortgage to suit. Take a look at our charts for the best first-time buyer deals currently on the market or use our remortgage best buys to begin your search. You may want to think carefully about the fixed rate mortgages that are available – rates are low at the moment, so locking into one of these deals could preserve you from any financial shocks when base rate eventually begins to rise.

What next?

Take a look at first-time buyer mortgage deals

Find the best remortgage deals

Check out our fixed rate mortgage best buys

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.