House prices to rise by just 1% this year, says Nationwide
Household incomes and affordability in London and the South East will reduce demand according to a new report from the Nationwide according to The Negotiator.
House prices across the UK will rise on average 1% in 2018, returning to growth in the longer term, reveals the Nationwide report.
House prices rose 2.6% in 2017 down from 4.5% in 2016 as housing affordability problems and mounting pressure on household incomes continued to put the brakes on activity within the property market.
House prices across the UK experiences gains except in London where they fell by 0.5%.
Various commentators suggested that the market is being impacted by lower buy-to-let activity prompted by the recent stamp duty, tax relief and lending criteria changes, all of which have reduced demand for investment properties.
According to the Nationwide the amount of deposit needed on average for a first time buyer, especially in London and the South East has risen from £50,000 in 2007 to £80,000 in London in 2017 and from £38,000 to £50,000 in the South East as a whole.
With wages not rising in line with higher than expected inflation, it is now harder to save for a deposit than it was say 2-3 years ago.