This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at https://www.bbc.co.uk/news/business-65774620
The article has changed 9 times. There is an RSS feed of changes available.
| Version 0 | Version 1 |
|---|---|
| Housing market could be hit by higher interest rates, Nationwide warns | Housing market could be hit by higher interest rates, Nationwide warns |
| (32 minutes later) | |
| More rises in mortgage interest rates could hit the UK's housing market, Nationwide has warned. | |
| The building society said that house prices in the year to May fell by 3.4%, a bigger decline than the drop of 2.7% seen the month before. | |
| The Bank of England is forecast to raise interest rates even further because of stubbornly high inflation. | The Bank of England is forecast to raise interest rates even further because of stubbornly high inflation. |
| As a result, Nationwide said "headwinds to the housing market look set to strengthen in the near term". | As a result, Nationwide said "headwinds to the housing market look set to strengthen in the near term". |
| Official figures last week showed the UK inflation rate - which charts rising prices - slowed in April by less than expected to 8.7%. | Official figures last week showed the UK inflation rate - which charts rising prices - slowed in April by less than expected to 8.7%. |
| That led analysts to predict that the Bank of England will have to raise interest rates above their current level of 4.5% to as high as 5.5% to try to slow price rises. | That led analysts to predict that the Bank of England will have to raise interest rates above their current level of 4.5% to as high as 5.5% to try to slow price rises. |
| In the wake of the inflation data, a range of lenders increased their mortgage interest rates, with Nationwide making the most significant move with a rise of up to 0.45 percentage points. | |
| Figures released earlier this week also showed that nearly 10% of UK mortgage deals have been taken off the market since last week. | |
| No-deposits and other new ways to get a mortgage | |
| How much can a first-time home buyer borrow? | |
| Nationwide noted that interest rates are also projected to remain higher for longer. | |
| "If maintained, this is likely to exert renewed upward pressure on mortgage rates," said Robert Gardner, Nationwide's chief economist. | "If maintained, this is likely to exert renewed upward pressure on mortgage rates," said Robert Gardner, Nationwide's chief economist. |
| House prices edged down by 0.1% in May, the Nationwide said, taking the average property price to £260,736. | |
| Mr Gardner added that average prices were still 4% below their August 2022 peak. | |
| However, he said that the building society was not expecting a dramatic downturn in the housing market, given that "labour market conditions remain solid and household balance sheets appear in relatively good shape". | |
| "While activity is likely to remain subdued in the near term, healthy rates of nominal income growth, together with modestly lower house prices, should help to improve housing affordability over time." | |
| Related Topics | Related Topics |
| Nationwide Building Society | Nationwide Building Society |
| Personal finance | Personal finance |
| Housing market | Housing market |
| UK economy | UK economy |