According to Nationwide Building Society's house price index, property prices in the UK actually increased by 1.3% in May this year. They expect prices to continue rising but on a much smaller scale for the rest of the year.
The survey also revealed that the number of houses actually selling in the UK had fallen by 7%. Nationwide commented that the fall was helped by the reduction in first time buyers. They put this down to low market confidence and the more pressing issue of actual affordability.
Whilst first time buyer numbers are continuing to fall, the number of mortgages being taken out by existing homeowners is said to be stable. Nationwide is of the opinion that house sales in the UK will continue to fall until at least the end of the year.
Our View
With house prices continuing to rise and the lack of confidence in the economy, first time buyers will face many worries, including their employment stability and whether salaries will increase to cover potentially rising costs.
We believe that first time buyers need to be realistic about what they can afford and not over-stretch themselves.
Protecting against redundancy and being off work sick is also vital but must also be affordable.
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