The annual rate of house price growth increased to 2.5% in October, according to the latest figures, pushing homes further out of the reach of aspiring homebuyers already squeezed by rising inflation.
The average UK home rose by 0.2% over the month to reach £211,085, Nationwide said, supported by low mortgage rates and healthy rates of employment growth.
However, pressure on household incomes is growing, with budgets stretched as property prices rise faster than wages.
Jeremy Duncombe, director, Legal & General Mortgage Club, commented: “The struggles for would-be homeowners certainly haven’t vanished. House prices continue to rise annually and if we couple this with the costs of stamp duty, younger buyers clearly face a big challenge making their first step onto the housing ladder.
“This leaves them with the choice of saving more for a deposit, relying on the Bank of Mum and Dad, if they have one, or becoming one of the ‘Boomerang’ generation that return home to living with their parents.”
Until the government sets out a package of measures to build thousands more homes for our growing population and ease the stamp duty barrier on younger buyers and older homeowners, the status quo will only continue, according to Duncombe.
He added: “The Autumn Budget is just around the corner, and that provides a perfect opportunity for the government to address the challenges facing Britain’s housing sector and get started on the path to a fairer market for all.”
Graham Davidson, managing director of buy-to-let specialist, Sequre Property Investment, believes that the latest hike in house prices will be welcome news for homeowners and property investors alike who will benefit from this capital growth.
He said: “Despite changing market conditions for landlords, we’re still seeing a strong demand for buy to let property across the board.
“Property continues to be the number one choice for investment as it continues to outperform other investment products and rising house prices combined with huge demand will result in this stance remaining unchanged.”
