UK housing market more positive but buyers look to bank of mum and dad – Nationwide 

The UK housing market is looking “more positive” according to the Nationwide, whose latest index reveals that average house prices increased by 0.7% in January – an improvement on December’s 1.8% fall in average prices.

However, analysis by the building society reveals that increasing numbers of first-time buyers are relying on family, friends and inheritance to fund their deposits.

The average UK house cost £257,656 in January, down by 0.2% on the previous year.

For Robert Gardner, Nationwide’s chief economist, buyers have been encouraged by lower mortgage rates. He said: “While a rapid rebound in activity or house prices in 2024 appears unlikely, the outlook is looking a little more positive.

“This follows a shift in view among investors around the future path of [interest rates], with investors becoming more optimistic that the Bank of England will lower rates in the years ahead.”

An average two-year fixed rate mortgage currently costs around 5.56 per cent – a big increase on the 2.34 per cent rate buyers were paying in 2021 but significantly lower than July’s 6 per cent peak.

With raising a deposit is a challenge for many would-be homeowners, increasing numbers of prospective buyers are turning to family for financial help. According to Nationwide, almost half of first-time buyers in 2022/23 had assistance raising a deposit, in the form of a gift, loan or inheritance, compared to 27% in the 1990s.

The Nationwide also highlighted figures from the Royal Institute of Chartered Surveyors (Rics) which show “tentative signs” of more homes coming to the market and a halt to a previous decline in new buyer enquiries.

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