Housebuyers facing 'significant' cost pressures
First-time buyers and homeowners looking to remortgage are still facing a “significant challenge” when it comes to finding affordable deals, the Halifax has said.
The lender’s comments came as it said the average UK house price rose by 0.1% in April, with a typical home now valued at £288,949.
Halifax said house prices have been largely flat in the early part of 2024.
Mortgage rates have been rising in recent weeks, mainly due to expectations that the Bank of England will make fewer interest cuts this year.
The Bank’s latest decision on interest rates will be announced on Thursday, with most analysts predicting they will be left unchanged at 5.25%.
Amanda Bryden, head of mortgages at Halifax, said the housing market was “finding its feet in an era of higher interest rates”.
“While borrowing costs remain more expensive than a few years ago, homebuyers are gaining confidence from a period of relative stability,” she added, with activity and demand improving.
“However, we can’t overlook the fact that affordability constraints are still a significant challenge, for both new buyers and those rolling off fixed-term deals,” Ms Brydon said.
“Mortgage rates have edged up again in recent weeks, primarily as a result of expectations around future Bank of England base rate changes, with markets now pricing in a slower pace of cuts.”