Data from the Nationwide and Land Registry shows house prices grow is the lowest since 2013 and reduced in January.

The Nationwide, the country’s biggest Building Society, has said annual house price growth for the UK was 0.3% in January and has slowed to 6.8% down from 7.2% in December.

Other data from the Land Registry shows house prices in England and Wales to December are 7% down from 7.2% in November.

Average house prices in January for the UK are £188,446 according to the Nationwide and in December for England and Wales the Land Registry average is £177,766.

Uncertainty for homebuyers

The slowdown could be due to uncertainty over the general election in May which could impact the housing market. As a result first time buyers, home movers and buy-to-let investors have been hesitant about making a house purchase.

At the top end of the market with properties of £2 million or more there is a threat from Labour’s mansion tax and this has slowed the London market in the last few months.

Even so figures from the Land Registry show London house prices rising 1.8% in December compared to the UK average of 0.6% up compared to November.

For older remortgage buyers that are required to repay their loan by the lender at a certain age, rather than downsizing they can agree a lifetime mortgage.

Mortgage approvals below normal

The Nationwide has said the number of mortgage approvals is 20% lower than the level reached at the beginning of 2014. Surveyors are also reporting lower levels of enquiries from first time buyers, home movers and buy-to-let investors.

The supply side of the property market is critical for determining the rate of growth in house sales, says Nationwide. Surveyors have reported a drop in supply of houses to the market which would explain the rise in prices despite the decline in demand since the summer.

The drop in demand is difficult to determine as unemployment has reduced and wage growth is rising faster than the cost of living for the first time since the financial crisis.

Affordability levels do not appear stretched on national levels with first time buyers mortgage loan multiple at 3.39 and home movers at 3.01 times earnings.

Construction of new builds has increased by 8% in the third quarter of 2014 and this should help property market momentum although it remains 34% below pre-crisis levels.

There may be fewer suitable homes on the market as the equity release buyer can avoid downsizing and agree a lifetime mortgage to access cash from their home to repay an interest only mortgage, gift to a family member or help children start or expand a business.

What are your next steps?

Call our LCM mortgage brokers if you are a buy-to-let landlord with a property, remortgaging and want the best mortgage deal, buying your first home or you are planning to move home.

Start with a free mortgage quote or call us and we can take your details. Learn more by using the mortgage cost calculators, property value tracker chart and equity release mortgage calculator.

For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your home to consolidate debt, for home improvements or even buy a more expensive home.

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