Yesterday saw Rightmove release data indicating that the average property price in the UK slipped by 0.4% in June, in comparison to the previous month.
However, would-be property investors should take these figures with a pinch of salt according to Jeremy Duncombe, director at Legal & General Mortgage Club.
Mr Duncombe, a mortgage expert, explains that despite the typical asking price this month dropping to £316,109, prices are still up by 1.8% on a yearly basis.
Despite this being the lowest rate of annual price growth seen since April 2013, residential property prices are still rising. However, there are concerns that in regions where affordability levels are stretched, less households are able to take part in the market.
Duncombe observed: ‘Although the data shows a minor decrease in monthly house price growth, on a year-on-year basis, house prices are still rising. Potential buyers are having to increase their borrowings, or depend on family members to help fund a deposit.’
‘For many workers, price increases are occurring at an unattainable rate, with house prices now at a record 7.6 times earnings. For London, this is stretched to more than 10 ten times,’ he continued.
Is UK property price growth rising at an unattainable rate?
A main cause for the increase in property prices is due to the fact that demand continues to outstrip supply in many regions of Britain. This once again underlines the need for new affordable housing to be developed.
Mr Duncombe went on to say: ‘Once the dust has settled in the newly-formed government, the task of building more affordable housing needs to become an urgent priority on the agenda. Building affordable housing in the right places will help first time buyers to take their first steps onto the property ladder.’