Annual house price growth in the UK slowed to 7.2 per cent in October, from 9.5 per cent in September, according to Nationwide this morning.
It means the average cost of a home in the country now stands at £268,282.
Nationwide chief economist, Robert Gardner, likened current mortgage rates to annual wage ratios to those which prevailed prior to the financial crisis in 2008.
“Higher borrowing costs have added to stretched housing affordability at a time when household finances are already under pressure from high inflation,” he said.
“The increase in mortgage rates meant that a prospective first-time buyer earning the average wage and looking to buy a typical FTB home with a 20 per cent deposit would see their monthly mortgage payment rise from c.34 per cent of take-home pay to c.45 per cent, based on an average mortgage rate of 5.5 per cent.”
In separate data from the Bank of England yesterday, it was revealed that Brits are being put off homeownership in the face of rising interest rates, with mortgage approvals plunging significantly last month.
Approvals for house purchases fell significantly to 66,800 in September from 74,400 the month before.
The interest rate paid on newly drawn mortgages in September grew 29 basis points to 2.84 per cent – the largest monthly increase since December 2021.