Brian Murphy, Head of Lending at Mortgage Advice Bureau (MAB), comments:
“Tighter lending regulations and the summer slowdown have started to inject a double dose of reality into the housing market, with the rate of price rises outside London and the South East far lower than the UK average. Nevertheless, the slowing of growth between May and June has been modest at best. The latest ONS figures suggest we have passed the point of seeing a higher rate of increase every month – temporarily at least – but demand for homeownership remains strong and will help to uphold prices for the foreseeable future.
“First time buyers continue to bear the brunt of rising prices, having seen their average purchase price climb 12% in a year compared with 9.5% for existing owners. Affordability remains a key concern in the current climate, which means that lenders’ continuing support for first time buyers, through Help to Buy and mortgage products allowing family assistance, is more important than ever.
“The heady growth of London house prices may mean that extra lending restrictions from the Bank of England bite sooner rather than later for borrowers in the capital and surrounding areas. It is vital that the supply of new homes on the market catches up with demand to avoid limiting the options even further for would-be owners in these areas.”