Annual property growth slipped to 0.5% in October with average values flat at £273,566, driven by weak buyer inquiries and rising home loan costs. Financial providers recorded average fixed-rate products hovering near the 6% threshold as financial markets anticipate an impending Bank of England base rate increase to 4%. Chancellor John Healey announced a £4.7bn initiative to assist buyers without family wealth, but industry analysts warn persistent high borrowing expenses will overshadow government aid and keep pricing subdued.
Key points
Rising fixed mortgage rates are currently deterring prospective purchasers and severely s…: Rising fixed mortgage rates are currently deterring prospective purchasers and severely suppressing UK property growth.
Markets widely anticipate the Bank of England's monetary policy committee will increase t…: Markets widely anticipate the Bank of England's monetary policy committee will increase the base rate to 4% next week.
Analysts warn targeted government housing initiatives will fail to fully offset the press…: Analysts warn targeted government housing initiatives will fail to fully offset the pressure of elevated borrowing costs.
Sources checked by our analysis pipeline: 1
UK house prices grew by an annual rate of just 0.5% in October, the slowest pace in more than two years, as higher mortgage rates put off potential buyers.
The average price for a property in the UK stood at £273,566 in October, flat on the previous month and down from 0.8% in the year to September, according to the lender Nationwide.
The slowdown in the market comes as buyers face higher borrowing costs. This month the average cost of a five-year fixed rate mortgage hit the 6% barrier for the first time in three years.
The average stood at 5.99% on Thursday, according to the financial information provider Moneyfacts, while the average two-year rate was not far behind at 5.97%.
There has been no change in the Bank of England base rate since last December, but volatility in the bond market has driven up the swap rates that influence the pricing of fixed-rate mortgages.
While the Bank of England has kept its key interest rate on hold at 3.75%, expectations are growing that next week the monetary policy committee…
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