UK house price growth is slowing. While prices rose 1.2% in June compared to last year, this is down on May’s 1.9% growth, according to property website Zoopla. Its house price index – which forecasts a 5% fall in house prices this year – also shows that 42% of sellers are now accepting offers of more than 5% below asking price, the highest level since 2018.
This may be seen as a positive for first-time buyers who have been subject to steadily rising prices in recent years. But the Bank of England’s decision to crank up interest rates to combat inflation over the past year means that mortgage costs have been rising. This is squeezing people’s affordability and offsetting some of the relief over falling prices. Indeed, mortgage borrowing has reached the lowest level on record (excluding the period since the onset of the COVID pandemic), according to Bank of England data.
