Lending and house price growth slows

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ONS data shows house prices for first-time buyers rose at a slower rate than the previous month in the year to August.

Whilst continuing to rise, first-time buyer house prices increased by 3.8% in the year to August, down 0.6% from July, meaning that the average price a first-time buyer would have paid in that period was £215,000, the ONS says.

The news comes as the Council of Mortgage Lenders (CML) revealed that there was the usual seasonal lending “slump” in August. 

Brian Murphy, head of lending at Mortgage Advice Bureau, claimed that the levels of activity seen in August is typical for the summer period. 

“Overall, the market is looking in far healthier shape than a year ago when house prices were rocketing and the mortgage market was still adjusting to new affordability rules. 

“Annual growth of between 5% and 6% looks far more sensible than the double digit growth seen this time last year, although it doesn’t reduce the need for government to put house-building firmly at the top of its agenda. 

“For now, it’s encouraging to see first-time buyers less impacted than home movers by rising prices, and there is also a significant head of steam building in the remortgage market. 

"Sooner or later, the predictions of an interest rate rise are going to come true and existing borrowers would be best not waiting until the last minute to find out if they can move on to a better rate.”