Prices across Britain rose at their slowest pace in more than four years… Homeowners across the UK are facing a double blow of increased mortgage payments and a slowing housing market. As of last week, London houses fell for the first time in eight years.
Across the UK the average price of a home increased at its slowest pace in more than four years in September, according to Nationwide.
Mark Carney, governor of Bank of England, stated, “the central bank’s Monetary Policy Committee would raise its benchmark interest rate from 0.25 percent… and if the economy continues on the track that it’s been on… we can expect that interest rates would increase somewhat.” – A rate hike would mean more expensive home loans for homeowners who have grown used to ultra-low interest rates.
A 0.25 percent rise would mean a person with a £200,000 mortgage on the average UK variable rate of 4.6 percent would pay an extra £28.72 per month. Though, higher payments could prove painful for homeowners, especially as the housing market begins to stutter.
London house prices fell 0.6 percent in the year to September, Nationwide said – the first annual drop since the aftermath of the financial crisis in 2009. It was the first time since 2005 that London was the worst performing region in the country.
UK house price growth has collapsed since last June’s Brexit vote when values were rising at an annual rate of more than 5 percent.
Record-low interest rates had supported the market, Nationwide said. However, that effect is now being canceled out as household incomes come under increased pressure. Although, Nationwide said a small rise is likely to have minimal impact on the housing market as a whole.