Mortgage Advice Bureau comments on the Nationwide House Price Index

Brian Murphy, Head of Lending at Mortgage Advice Bureau (MAB), commented:

“Just as the house price rollercoaster appeared to be reaching its peak, the latest figures suggest the brakes are starting to be applied as the rate of growth settles into a more sedate pace. The effects of the Mortgage Market Review (MMR) are finally starting to bed in, ushering in a more relaxed pace of activity and providing welcome respite for potential buyers who have been faced with sixteen consecutive months of house price rises.”

“Monthly house price changes are volatile, and it will be a while before we are able to paint a full picture of the housing market post-MMR. However, the more detailed affordability checks imposed by MMR should slow down the turnover of mortgage applications and temper demand, ultimately leading to a reduced rate of house price growth. That’s not to say that the market won’t still be healthy: both consumer and lender confidence is strong, leaving plenty of room for further recovery.”

“Affordability is a key concern for many first-time buyers, so even if house price growth does start to slow, it is vital that there is still plenty of financial support available for those who need it. The continuation of government schemes such as Help to Buy and wider availability of 95% mortgage lending remains crucial in helping those who can only afford a small deposit onto the housing ladder. The construction industry must also ramp up production of new homes to ensure the dangerous imbalance between supply and demand is corrected.”