House prices climb in January - but warning that the property market could slow later this year
manchestereveningnews.co.ukThe UK property market has witnessed a strong start to the year, with the fastest house price growth since 2005. According to Nationwide's house price index, house prices rose annually by 11.2% in January 2022, up from 10.4% in December 2021.
As of last month, the average price of a property in the UK was £255,556, which increased by 0.8% from £254,822 in December.
But property experts have predicted that the housing market is likely to slow down later this year due to affordability. READ MORE: First-time buyers should look out for these red flags when viewing a home Nationwide have now warned that reduced housing affordability is likely to dampen market activity and house price growth - as people’s household bills are also increased by the wider surge in living costs.
Robert Gardner, Nationwide’s chief economist, said: “Annual house price growth accelerated to 11.2% in January, the strongest pace since June last year, and the strongest start to the year for 17 years. “House price growth has outstripped earnings growth by a wide margin since the pandemic struck and, as a result, housing affordability has become less favourable.M “While the outlook remains uncertain, it is likely that the housing market will slow this year." Gardner said that the current housing market prices are making it increasingly difficult for first time buyers to secure a home. “For example, a 10% deposit on a typical first-time buyer home is now equivalent to 56% of total gross annual earnings, a record high," he explained. “Similarly, a typical mortgage payment as a share of take-home pay is now above the long-run average, despite mortgage rates remaining close to all-time lows. “Reduced affordability is likely to exert a dampening impact on
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