Annual house prices in the UK have slowed from 6.8% to 5.7% in February for the first time in five months decreasing by 0.1% during the month.
The Figures from the Nationwide show house price inflation at 5.7% which is significantly lower than the 11.8% high of June 2014.
Average UK house prices are lower reducing from £188,446 in January to £187,964 in February. These figures from Nationwide are based on their own data of approved home mortgage loans.
For home movers wanting to trade up when prices are falling, they may find the gap between their current home and the next decreases making it more affordable to buy.
Nationwide’s chief economist, Robert Gardner, says mortgage rates remain close to their all-time lows and consumer confidence is high as the labour market improves.
Mortgage approvals remain higher
Even though the rate of house price rise is slowing, the number of mortgage approvals have increased slightly.
Figures published by the Bank of England show mortgage approvals increased from 60,349 loans in December to 60,786 loans in January although this is below the average for the previous six months.
For older homeowners there is higher activity with equity release mortgages buyers accessing cash in their property to improve their quality of life or reduce inheritance tax owed by your beneficiaries.
This has been helped by a decrease in mortgage rates from lenders making the cost of home ownership cheaper for first time buyers, home movers, remortgage buyers and buy-to-let landlords.
The combinations of lower mortgage rates and reforms in stamp duty in December are likely to see house prices rise by 5% by the end of the year according to analysts.
For remortgage buyers currently on their lenders standard variable rate, switching to a new mortgage deal on lower rates would help them to reduce the cost of monthly repayments.
Home ownership declining
Nationwide has said there has been a downward trend in home ownership with the number of homes owned falling to 63.3% last year down from 65.2% in the previous year.
Home ownership has reached a 30 year low and is eight percent lower than the all-time high of 70.3% reached in 2003.
The number of owner occupiers has also now exceeded the number of people buying with a mortgage in 2013-14 coupled with a sharp decline in the number of first time buyers.
In particular, the number of young first time buyers aged 25 to 34 years old owning their own home has declined from 59% in 2004 to 36% in 2014.
Over the same period the proportion renting has increased from 41% to 64% and for those aged 16 to 24 years old the proportion renting increased from 71% to 91%.
To reverse this trend the Government is planning a new “starter homes” scheme offering a 20% discount for first time buyers under the age of 40 years to buy their own home.
What are your next steps?
Speak to our LCM mortgage advisers if you are planning to move home, buying your first home, remortgaging your existing home to a new cost effective mortgage deal or are a buy-to-let investor.
Learn more by using the mortgage cost calculators, equity release calculator and property value tracker chart. Start with a free mortgage quote or call us and we can take your details.
For equity release buyers our London City Mortgage brokers can recommend lifetime mortgages allowing you to receive cash from your property to help maintain your standard of living as costs rise or gift to a family member or friend.
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