By any metric its clear that housing in the United Kingdom is costly. The charges are so elevated that the proportion of house prices to disposable income has surged two to three times in the last two decades.
The availability of supplies is limited due to various challenges such as development nimbyism, carpet bagging land banking, and ideological and fiscal constraints that pose obstacles for investment in social housing.
However, according to a recent report by Nationwide, UK house prices experienced the sharpest decline in almost 14 years in May. The data shows a decrease of 3.4% in house prices from the previous year, marking the most significant drop since July 2009.
Additionally, it warned that an increase in mortgage interest rates could potentially impact the housing market.
Due to the persistent high inflation rate, the Bank of England is expected to raise interest rates, causing a recent increase in mortgage rates.
According to the Nationwide, house prices slightly decreased, coming down by 0.1% in May, and the average price of a property is now at £260,736. The report also stated that the average prices are currently 4% lower than their peak in August 2022.
Excluding the period since the beginning of the pandemic, the most recent statistics from the Bank of England indicate a drop in net mortgage lending during April. The number of approvals for mortgages on house purchases decreased from 51,500 in March to 48,700. The latest official figures indicate that the UK inflation rate, which measures the increase in prices, eased in April to 8.7%, but this was not as much of a decline as was anticipated.
So with any hope, house prices will continue to drop and many people will be able to buy a house by the time they retire.