

The sharp increase in borrowing costs is expected to trigger a “significant drag” on the housing market, Nationwide has warned, as lenders continue to push mortgage rates higher.
Nationwide Building Society released figures showing house prices were down by 3.5pc compared to where they were last year, although they remained broadly flat in June compared to May.
However, with rising lending costs, a first-time buyer earning the average wage and buying the typical property with a 20pc deposit would be spending much more of their take-home pay on their mortgage than the long-term average, Nationwide said.
It added: “House prices remain high relative to earnings, and as a result, deposit requirements are still a significant barrier for those looking to enter the market.
“A 10pc deposit on a typical first-time buyer home is equal to around 55pc of gross annual income – this is down from the all-time highs of 59pc prevailing in late 2022, but still marginally above the levels prevailing before the financial crisis struck in 2007/8.”
It comes after lenders yesterday raised their mortgage rates for two and five-year fixed deals even further, following the Bank of England’s increase to the base rate last week.
Nationwide added: “Despite the higher interest rates available to savers, the sharp rise in rents, together with continued high rates of inflation more generally is continuing to make it difficult for many prospective buyers to save for a deposit.”
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