THE MONEY STATS – House price growth slows but cost of living continues to shoot up

The growth in house prices in the UK slowed significantly over the past month, reveals the December Money Statistics. Last month, the annual growth in house prices stood at 3.9%, down from 4.5% in the year to October.

The dip in growth comes with a number of housing policy changes from the government in the Autumn Budget. Removal of Stamp Duty for First Time Buyers on the first £300,000 of their purchase, and a commitment to build 300,000 homes a year until 2020 may have had an impact on growth. And according to Halifax Community Bank, house price growth is likely to continue to slow in the long-term.

Whilst this news may is positive for many who have been unable to get onto the property ladder, accessing the disposable income needed to pay a deposit and subsequent mortgage is getting harder for many.

The Consumer Prices Index 12 month rate stands at 3% as of October 2017, with some of the largest contributors to inflation coming from basic needs products. For example, food and non-alcoholic beverage prices have risen by 1% between September and October, up 4.1% on the year. Weekly average pay increased by just over half that amount since last September.

This then correlates with the fact that even though the housing market growth is stabilising, fewer people are taking out mortgages. In October there were 40,488 loans approved for house purchases, 3% lower than what was recorded in the same month last year.

So despite the aforementioned policy commitments from the Autumn Budget, which should incentivise people to get on the property ladder, less and less people can afford to put down a deposit and take out a mortgage on a property.

Steph Hayter, Acting Chief Executive of The Money Charity says:

“As The Money Charity, we believe that everyone in the UK should have access to affordable and acceptable housing, whether that be through renting or buying. It is worrying that fewer people are able to afford to buy, even with the slowdown in both house prices and private rent growth in the UK. Without acknowledging the lack of growth in wages compared to house prices and living costs, the measures announced in the Autumn Budget could fall short of getting more people onto the property ladder.”

Other key points from the December Money Statistics include:

  • £1.87bn spent every day on debit and credit cards in September
  • The average student debt for those most recently entering repayment stands at £32,220
  • 21 properties were repossessed every day in Q3 2017

Get the full picture and many more fascinating facts about money in the UK in our monthly Money Statistics.