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Getting a foot on the UK’s property ladder has become borderline impossible for an entire generation of renters. Skyrocketing house prices combined with an unprecedented cost-of-living crisis have forced many to abandon their dreams of homeownership entirely.

Consequently, a study conducted by Ocasa indicates that more UK residents than ever before are viewing long-term private rentals as a viable alternative to homeownership. Affordability and flexibility were found to be the two main points of appeal among those seeking long-term rents over property purchases.

But even with the number of rental properties in the UK having increased by 1.1 million over the past 10 years, average rent costs are hovering at record highs. In fact, a full 86% of UK tenants said that rent cost increases have placed greater strain on their household expenses over the past few years.

This could be one of many reasons why tenants are actively seeking longer-term agreements with their landlords. Where possible, locking in an agreed-upon maximum rent in return for a longer-term tenancy agreement is becoming the preferred choice for many.

The alternative option is to risk regular and rapid monthly rent increases, each time a shorter tenancy agreement expires and needs to be renewed.

An escalating cost-of-living crisis

Where households are already struggling to make ends meet, utility price increases are the single biggest cause for concern. Monthly rent cost increases and fuel prices are also contributing to widespread financial instability, along with council tax bills and food prices.

Polled by Rentd, 46% of households said they were worried about further living-cost increases forecast for the remainder of the year, while almost 60% said they would likely have to make additional cutbacks over the coming months.

Speaking on behalf of Rentd, CEO and founder Ahmed Gamal highlighted how private tenants are being hit disproportionately hard by living cost increases.

“The cost-of-living crisis is particularly concerning for the nation’s tenants, many of whom would have already been struggling with the cost of renting and will now find they are being financially stretched to their limits,” said Gamal.

“During the pandemic, we saw rental values drop across a great deal of the market, but with normality returning this year, they are once again starting to climb. This means that many tenants may now be finding that the cost of renting in their given area is quickly becoming unaffordable.”

“When committing to a rental property, it’s important to consider that, much like a variable-rate mortgage payment, the cost of your rent is subject to change. So it’s vital to leave yourself some room within your monthly budget to account for this increase; otherwise, you may find yourself looking for a more affordable property or location.”

Discouraged by high upfront costs

Among those who would like to own their own homes but cannot afford to do so, the high upfront costs of purchasing a property are the biggest discouraging factor. Average UK house prices are now heading towards £300,000, meaning that the average deposit (at 15%) a buyer would need to come up with would be around £45,000.

Coupled with the rest of the initial costs associated with buying a home, the total on-hand savings needed to get the transaction underway would exceed £50,000.

The overwhelming majority of average earners in the UK simply do not have the capacity to come up with anything near this amount. All of which can be particularly disappointing for those whose monthly rent bills are significantly higher than the average monthly mortgage payment on a comparable property.

Despite being able to comfortably afford a mortgage in terms of repayments, millions are nonetheless unable to meet the basic requirements to qualify.

Even so, Jack Godby, Head of Sales and Marketing at Ocasa, was keen to point out how renting long-term need not always be seen as a last resort, worst-case scenario option.

“In the UK, popular opinion has long said that owning a home is better than renting; renting is something you do while you wait until you can afford to buy. But this isn’t the case in other countries, and it’s become less and less so here,” he said.

“People are now choosing to rent for the long term, rejecting buying altogether because of the many downsides that come with ownership, from the growing expense to the risk and inflexibility.”

“In reaction to this growing demand, rental providers are upping their game, providing high-quality homes with tenancy agreements that offer greater security and more freedom to make the property their own.”

“This is particularly true of the build-to-rent sector, which has grown phenomenally in just a few short years and looks to be one of the driving forces of change when it comes to how we choose to live.”

Planning a memorable wedding is not for the faint-hearted. Both in terms of the logistics involved and the costs, it can be a surprisingly time-consuming and complex endeavour.

According to the latest National Wedding Survey (conducted by Hitched.co.uk), the average cost of a wedding in 2021 was £17,300. This marks a dramatic increase from the £9,100 average in 2020 and is set to continue escalating as inflation continues to skyrocket.

In general, experts recommend setting aside around £20,000 as a base figure once all expenses have been factored in.

Unfortunately, this simply isn’t the kind of money most people have lying around. Some couples save for several years to pay for their dream weddings, while others turn to family members for support. But there is a practical and flexible alternative for those who can neither save nor borrow the money they need from their loved ones.

Designed specifically for making special days as special as they can be, a wedding loan could be just the thing to make the whole thing more affordable.

What are wedding loans?

Wedding loans are typically issued in the form of unsecured personal loans, but there are also secured borrowing options available. Terms, conditions, and borrowing costs vary in accordance with how much you borrow, the length of the repayment period, and your credit status.

Depending on the lender you choose, you could be looking at a total interest payable of anything from 5% to more than 35%. The balance of the loan can be repaid over monthly instalments spanning one to 10 years, and there is no upfront payment (deposit) required.

Some banks issue standard personal loans that can be used to fund weddings, while others provide specialist wedding loans issued exclusively for this purpose. Either way, the money can be used to cover the costs of venue hire, catering, transport, attire, décor, and even the honeymoon of a lifetime.

How much money can I borrow with a wedding loan?

The amount you can borrow will be determined by your financial status and creditworthiness at the time of your application. In the case of an unsecured personal loan, the following factors will be taken into account by your lender:

• Your credit score
• Whether you apply individually or as a couple,
• Your chosen lender
• Your income and debt
• Your general financial status

With personal loans for weddings, it is possible to borrow anything from £1,000 to around £15,000, depending on your financial circumstances at the time. For figures in excess of this, a secured loan could be a better option.

With a secured loan, there are technically no limitations to how much you can borrow. The loan is secured against assets of value (usually the home of the borrower) in the same way as a mortgage.

Secured loans are typically issued in sums of £10,000 or more and can have lower rates of interest than comparable unsecured loans. However, it is important to acknowledge the fact that your home may be at risk of repossession if you do not keep up with your monthly repayments.

When should you get a wedding loan?

Applying for a wedding loan could be the best course of action if the following apply:

• You need the money as quickly as possible, either having decided to get married in the near future or with the date of your wedding approaching and various costs still outstanding.
• Your credit score is up to scratch, as this is the main factor that will determine your eligibility for an unsecured personal loan.
• You can comfortably afford the monthly repayments, having considered both your immediate and your long-term financial situation.

Before applying, consult with an independent broker to discuss your eligibility for wedding finance and the various unsecured and secured funding options available.

How to get a loan for a wedding

If you need to borrow money to pay for a wedding, there are a few steps to take before the money hits your account.

Pros and cons of wedding loans

Broker support is essential to ensuring you get a good deal on a wedding loan. Your broker will scour the market in its entirety to find you an appropriate product and will negotiate on your behalf to ensure you get the best possible deal.

In addition, your broker will ensure you are familiar with the basic pros and cons of wedding loans, which are as follows:

Pros

• Wedding loans can be secured or unsecured. This opens the door to a variety of different types of loans for all applicants, including those with poor credit or no formal proof of income.
• Interest rates are lower than credit cards. Interest rates on credit cards can be anything from 0% to more than 25%. With a typical short-term wedding loan, you could be looking at an interest rate of around 5%.
• Fast-access funding is available. With specialist products like bridging loans, the money you need could be in your account and ready to use within a few working days.

Cons

• Additional debt.  By taking out a wedding loan, you will have one more formal debt to contend with when the dust settles.
• Temptation to overspend. There is also the undeniable temptation to borrow more than you need and more than you can afford to make your wedding as lavish as possible.
• Restricted lending. Unsecured wedding loans are issued exclusively to borrowers with excellent credit scores and extensive proof of their financial position.

Alternatives to wedding loans

Where specialist wedding loans are unavailable or simply not your preferred choice, the following can also be used to cover the costs of a wedding:

Credit cards

Some credit cards provide new customers with an introductory 0% interest period, which can be great for spreading the costs of larger purchases or investments over a year or so.

Bridging finance

Fast-access bridging loans are ideal where short-term repayment is possible, are charged at around 0.5% more per month, and have minimal associated borrowing costs.

Home equity loan

There is also the option of borrowing against the equity you have tied up in your home in the form of a remortgage, a mortgage extension, or a specialist home equity loan.

Before deciding which of the options is best for you, consult with an independent broker for their input and advice. Your broker will also provide the representation you need to ensure you get the best possible deal, whichever product you decide to apply for.

Research suggests that most UK households are concerned about climate change and believe that steps need to be taken to safeguard the environment for future generations. A recent study conducted by the Office for National Statistics found that three in four (76%) Brits believe that climate change is a pressing issue that should be prioritised.

However, a separate study conducted by Cornerstone Tax found that a sizeable proportion of homeowners are being discouraged from boosting the energy efficiency of their properties due to the high costs involved. Around 45% of homeowners have investigated the prospect of making their homes more energy efficient but deemed any changes too expensive to go ahead with, without discounts or contributions from the government.

In addition, 22% said that they had taken steps to make their homes more energy-efficient but were unable to go ahead with their planned upgrades due to planning restrictions.

A major source of CO2

With around one-fifth of all CO2 emissions in the UK coming from residential properties, the importance of making collective improvements to household energy efficiency is clear. Consequently, the government recently outlined new legislation that would make it a legal requirement for all homes in the UK to have an EPC rating of C or above by 2035.

Energy efficiency is a priority shared by around 36% of households across the country, according to the report from Cornerstone Tax. However given the potentially high costs of conducting the necessary upgrades and improvements, around a quarter (23%) of those who would like to improve energy efficiency at home have made no effort to do so.

“It’s clear to me that the government will need to go further in incentivizing these types of developments if they wish to see more people carrying them out,” said James Morley, business development director at Cornerstone Tax.

Even so, Mr Morley was keen to point out the potential savings that can be made by conducting energy-efficient improvements to their homes. Examples of this include loft insulation, solid wall insulation, ground-source heat pumps, and double glazing, which, according to Morley, can translate to savings of up to £890 per year in reduced energy costs.

Affordable funding

Commenting on the findings, group chairman of Cornerstone Tax, David Hannah, told Mortgage Introducer that affirmative action from the government was necessary to steer things in the right direction.

Specifically, he suggested that the government should “offer soft loans to householders in the same way they did to businesses during the pandemic”, enabling homeowners to spread the costs of their energy-efficient upgrades over several years at a lower rate of interest.

“While the current reduced VAT charges on energy efficiency expenditure are welcome, they do not cover a wide enough range of products and are ultimately only a small help to hard-pressed families,” he said.

“The net gain of reduced carbon emissions by insulating, allowing double glazing and other energy efficiency and heat/power self-generation measures vastly outweigh the costs in terms of the environment. Again, the government could assist with medium-term loans in the region of 10-year soft loans to enable these properties to be brought up to modern energy efficiency standards.”

When borrowing funds, it is common for prospective lenders to assess one’s financial assets and liabilities before dispatching money. Lenders evaluate your financial situation to determine your creditworthiness and reliability when paying off your loan on time. Responsible lending is the process that helps lenders assess your ability to undertake a loan and make repayments without hindering your finances.

A debt consolidation loan is used to pay off multiple debts with a favourable interest rate and combine those payments into one. The borrower will pay one monthly fee instead of numerous charges each month.

While it sounds like an ideal solution, consider its advantages and disadvantages before going ahead with debt consolidation loans.

Responsible lending

There are numerous short-term financing options that can help you obtain funds at short notice, such as bridging loans and development finance. Both bridging finance and development finance loans offer investors a way out when facing a cash shortage. Irrespective of your choice of finance, responsible lending is a process that lenders rely on to predict your repayment ability.

Responsible lending enables the lender to decide whether you are in a position to repay the debt promptly. The process entails a detailed analysis of the applicant’s ability to make repayments without disturbing their financial situation and takes into consideration how potential future changes to market conditions may impact the applicant’s ability to repay.

Lenders use credit score examinations to understand how well you have been managing your finances. Your credit score report acts as a catalyst for a potential lender. To ensure that you can repay the money borrowed, the lender often inquires about your income, monthly financial liabilities, and regular expenses.

As per the FCA rules, credit card companies must monitor customers who get stuck in a ‘persistent debt’ cycle, including those who repeatedly make only the minimum monthly repayments over three years.

Responsible lending practices reassure providers and assist customers struggling with repayments by either asking them to switch to lower-rate products or suspending their credit cards to keep their debts in check.

Financiers generally carry out all the necessary inspections before approving customers’ loan applications. However, the terms and conditions of the loan are subject to change anytime during the loan tenure, which may impact the customer’s finances.

Debt consolidation

Debt consolidation is the ideal solution for people with multiple debts who wish to merge all their outstanding balances into one single amount instead of making separate monthly repayments. Taking a new loan may enable you to settle all your debts and streamline your repayments as a single amount to be paid every month.

In consolidated borrowing, there is no specific solution for everyone; interest rates on personal loans can be lower than other types of loans; however, applying for the advertised rate does not mean the lender will offer it. The interest rate offered varies depending on an individual’s circumstances, and it is often necessary to have a good credit record to obtain a loan.

There are various options to repay debts, such as switching the existing debts from credit or store cards to a card with lower interest rates or even a 0% balance transfer, subject to one’s credit score. No interest is paid during the initial term, so your monthly payments will directly clear your debts. The interest rate will be applicable if you do not clear the balance before the initial period ends. Some cards may charge balance transfer fees of up to 3%. Be aware of the promotional rates that only apply for a specific time.

Some options to overcome debt include working with creditors to settle the debt, using a home equity line of credit, or getting a debt consolidation loan. Debt consolidation loans pay off multiple creditors and combine those monthly payments into one, sometimes at a lower interest rate. It sounds like an ideal solution, considering both the pros and cons of debt consolidation. Debt consolidation combines two or more debts into a single, more considerable debt. Often, consumers burdened with a high-interest rate take a step towards debt consolidation. In simple terms, debt consolidation gives you more favourable loan terms and potentially more competitive interest rates.

Advantages and disadvantages of debt consolidation

Let us look at the advantages and disadvantages of debt consolidation:

Five advantages of debt consolidation

• Smooth Finances 

As debt consolidation combines multiple outstanding amounts into a single loan amount, it reduces the number of payments. You no longer have to worry about multiple due dates as you will only have one payment. Consolidation can improve your credit rating by reducing the chance of making a late or missed payment.

• Accelerate Payoff

Debt consolidation sometimes incurs less interest compared to individual loans. In that case, you may consider making extra payments with the money you save each month. If debt consolidation leads to an extension of loan terms, you may wish to ensure that your debts are paid off early to see the cost savings.

• May Decrease Your Interest Rate

Bank of England figures reveal the average annual interest rates offered on credit cards have increased to 21.49% compared with the introductory rate of 0.1%. It is the highest average credit card rate since December 1998. However, the rates vary depending on your credit score, loan amount, and the length of your credit card term. A lower interest rate may be available through a debt consolidation loan, meaning more of your monthly repayment is used to clear the outstanding balance.

• Could Reduce Monthly Repayment

Your overall monthly repayments may decrease with a consolidated loan by combining multiple payments into one manageable monthly figure. You may wish to increase the loan term to reduce your monthly repayment; however, you should take into consideration that a longer loan term may cost more overall.

• Can Help You Achieve a Better Credit Score

By consolidating your monthly repayments and outstanding balances, you may see your credit score improve. Each credit agency has its system to calculate the credit rating in the UK; paying a single monthly bill is considered by these agencies to raise your credit score, as opposed to making the minimum payment across several creditors.

Four disadvantages of debt consolidation

• May Add Up Extra Cost

Before going ahead with debt consolidation loans, make sure they do not involve additional fees such as arrangement fees, balance transfer fees, closing costs, and annual fees. Check the annual percentage rate of charge before you sign the loan papers, and ask the lender to confirm any other charges if you are unsure.

• You may pay more interest over time.

Even if your interest rate goes down while consolidating, you could still pay more in interest over the life of the new loan. If you have extended the repayment term of your borrowing, although your monthly interest may be lower, interest on your loan will continue to be incurred for an extended period.

• You risk missing payments.

Missing payments on any loan can impact your credit score, making it harder to obtain low-cost credit in the future. It may also result in a financial penalty from the lender, which could increase your borrowing costs. To avoid missed payments, you can enrol yourself in the lender’s autopay programme, or if you feel you can’t make a payment on time, whatever the reason, communicate with your lender as soon as possible.

• Does not solve the underlying financial problems

Consolidating debt can help to make debt more manageable; however, if you are habituated to living beyond your means, you may continue to borrow in addition to the debt consolidation loan. Making a realistic budget will help you stick to your financial goals.

How should I consolidate my debt?

Choosing to take a debt consolidation loan will depend on your financial circumstances. A few pointers when considering debt consolidation include:

• A good credit score will give you a better chance of securing a lower interest rate than you have on your current debt, saving you money.
• Your monthly repayment, interest rate, and repayment term are fixed. If you need a repayment plan to help reduce your debts, a debt consolidation loan might be right for you.
• If you do not like keeping track of multiple payments, a debt consolidation loan will combine all payments into one.
• Consider a debt consolidation loan only if you can afford to repay it; unlike credit cards, where you have the flexibility to make only the minimum repayment, a debt consolidation loan will have one monthly fixed repayment, and missing this could impact your credit profile.

How do I get a debt consolidation loan?

The following steps will help you go ahead with a debt consolidation loan.

• Lenders may have minimum credit score requirements; check your credit score to see if you meet the lender’s standard for providing a consolidation loan. Inaccurate and incomplete information will lower your chance of getting a consolidation loan.
• Decide your loan amount and add up the debt you want to consolidate to see how much money you need to borrow. Keep in mind that arrangement fees may be added to the loan amount.
• Thoroughly research various lenders; reviewing their websites will help you see eligibility requirements, loan terms, and fees. You can also take a debt consolidation loan from a bank.
• Prequalification will give you an estimate of the loan rate and terms. Lenders generally use a soft credit check to confirm your eligibility, so your credit score will not be affected.

While debt consolidation has several merits, it is essential to weigh up your options. Depending upon the nature of your project, its status, and stage, customised solutions are offered by our highly experienced team of professionals, who assist you in selecting the right product, the right loan amount and tenure, the very best interest rates, and complete details on repayment options. Contact us today to learn more about the best finance options available.

The general picture for mortgage payers across the UK is becoming increasingly bleak. At no time since the historic recession of 2008 have more households struggled to keep up with their mortgage repayments? As the living cost crisis continues to escalate, things are only likely to worsen before showing any signs of improvement.

New figures from Octane Capital, a specialist property lending company, suggest that average monthly mortgage payments in relation to average salaries are breaking almost every record in the books. Taking the current average property price of £276,019 along with a 75% LTV mortgage on a 3-year fixed-rate deal, the average homebuyer is currently looking at a loan size of just over £207,000, assuming they pay a deposit of 25%.

Charged at an APR of 1.84% and taken out over 25 years, this all adds up to a standard monthly repayment of just under £860.

Across the UK, the average earner’s gross salary currently stands at £31,447, or £2,621 per month. This would therefore mean that a monthly mortgage payment of around £860 would immediately wipe out almost 33% of this average earner’s monthly income.

This is 3.1% higher than in 2011, 4.7% higher than in 2017, and a full 5% higher than at the beginning of 2020, just before the pandemic hit. In fact, the exact figure, 32.8% of the average earner’s salary going on mortgage repayments, was only higher during the 2008 recession, when it hit an unprecedented high of 34.3%.

Interest rate hikes hit households hard

The overwhelming majority of households across the UK have been hit hard by a string of recent interest rate hikes, compounded by record-high energy bills and unprecedented inflation.

“The cost of living crisis is a current cause of great concern, and many homeowners are not only combating the inflated cost of day-to-day living but also the monthly cost of their mortgage following a string of interest rate increases,” said Octane Capital CEO Jonathan Samuels.

“At the same time, wage growth has simply failed to keep pace with these rising costs, and so the proportion of our income required to cover our monthly mortgage commitments is now substantially higher than it has been for many years.”

Far from any real light at the end of the tunnel, most experts believe things are only set to worsen before there are any signs of improvement.

“Unfortunately, this cost only looks set to increase, as we expect to see interest rates increase further throughout the year. The best advice for those currently struggling is to consult a mortgage professional and see if they can swap to a product offering a better rate. For those currently looking to buy, it’s vital to factor in any potential increase and not borrow beyond your means based on current rates,” Mr Samuels warned.

“While the current cost of borrowing may still remain fairly favourable, it’s vital you consider what any further increases may mean for your financial stability, as those borrowing right up to their limits initially are sure to struggle further down the line.”

Mortgage payers are forced to dip into savings

During the pandemic, many households took the opportunity to amass considerable savings. Making the best of a bad situation, those who suddenly found themselves confined to their homes also found themselves with fewer ways to utilise their disposable income.

Unfortunately, this broad financial safety net is not going to help the approximate 17% of households across the UK that do not have any on-hand savings at all.

That is according to a report published this week by the Yorkshire Building Society, which also suggests that almost 40% of savers have been forced to dip into their savings to cope with the escalating cost-of-living crisis. Among them, 17% said that they had already spent at least £1,000 from their savings on everyday living costs.

Around 4,000 households were polled by YBS with questions on their saving and spending habits over the past couple of years. While many benefited from a long period of capped spending during the height of the COVID-19 crisis, the results of the poll suggest that a sizeable proportion of households are saving less than they were a year ago, or not saving anything at all.

Inadequate support for struggling households

As promised, Chancellor Rishi Sunak outlined the government’s relief package for struggling households on May 26. Mr Sunak confirmed that £15 billion had been set aside to help households cope with skyrocketing living costs and that the poorest citizens would receive the most support.

However, a £400 discount on energy bills for every household and a £650 one-off payment to the poorest eight million people were criticised by many as insufficient. With further energy price increases on the horizon, the vast majority of UK households are destined to find themselves further out of pocket as the year progresses.

Elsewhere, others have praised the government for at least taking some form of action, albeit at a relatively late stage in the game.

“We know that other countries in Europe have taken measures to help households with their energy bills, so this is obviously very helpful from an economic perspective, unlike the previous plan that was made available in March,” said Nitesh Patel, strategic economist at Yorkshire Building Society, in an interview with Mortgage Introducer.

“The government’s measures are really quite important because we know that there are a lot of people in this country who don’t have any form of savings.”

“If a large proportion of the population starts to reduce their expenditure in other parts of the economy, then I think we could be in a very, very difficult economic situation.”

Further financial difficulties are expected

According to YBS, around 40% of UK households are expected to see their monthly outgoings increase by between £100 and £500 over the course of the next 12 months. Among those polled by YBS, 70% cited utility bills as their biggest cause for concern, followed by 60% who are already struggling with food and drink prices, and 58% worried about fuel prices.

While being interviewed by the mortgage introducer, Mr Patel was asked to share his thoughts on projected mortgage demand over the rest of the year. As mortgage rates increase and the living cost crisis worsens, prospective first-time buyers will be forced to reconsider whether they can realistically afford to own their own homes.

“The first thing to bear in mind is that many households that have managed to build up their savings are still in a fairly reasonable situation because the cost-of-living crisis has really only accelerated in the last three months, so they’re still okay at the moment, and there are obviously still some very good deals out there available for mortgages,” Patel said.

“In terms of mortgage demand, it is still very, very strong relative to supply. And that’s probably because mortgage rates are still very, very low.”

“We know that in the current environment, people who are economising are probably not going to spend money on areas that are not really essential, and that could have a similar effect on housing.”

Mr. Patel said that, in all likelihood, home purchase activity among first-time buyers will most likely decrease over the next six months. But as demand for affordable homes continues to outstrip supply by a significant margin, this is unlikely to have an adverse effect on sky-high property prices.

He also predicted a further spike in inflation beyond 10% by the beginning of next year, triggered by the upcoming energy price cap increase coming this October.

Millions of households are on the brink of economic disaster

With inflation already running at its highest level in almost three decades, more households than ever before are finding themselves on the brink of an outright economic disaster.

A recent study conducted by KIS Finance found that even before the most recent cost-of-living increases, a full 57% of UK households were already experiencing financial difficulties or expected to struggle financially in the near future.

Bank of England base rate increases have had a major impact on mortgage affordability, resulting in millions of mortgage payers struggling to make ends meet. While all this has been going on, Moneyfacts reports that around 520 mortgage products have been withdrawn from the market over the past month as banks become increasingly stringent with their lending criteria.

In total, KIS Finance reports that around 25% of adults across the UK are currently experiencing severe financial difficulties. Worse still, all indications point to further economic issues to come, as real wages are predicted to be lower by 2026 than they were in 2008.

The October energy price cap increase coupled with the elevated energy consumption during the winter months could add up to the perfect storm for households that are already struggling.

According to KIS Finance, younger households have been hit particularly hard by the living-cost crisis—around 35% within the 18–24 bracket say their current financial situation is anything but stable. In addition, 24% of people aged 18 to 34 are earning less now than they were at the beginning of the pandemic.

Given the extent of the crisis, the support package outlined by the Chancellor—a £400 discount on energy bills for every household and a £650 one-off payment to the poorest eight million people—is understandably being seen as a drop in the ocean for those worst affected.

Inflation on property prices remains at 11.2%, but signs show an expected slowdown in the property market.

According to a report by Nationwide, property price inflation is currently stuck in double digits, but it is predicted that we will soon see a slowdown in the market.

The average home price has dropped from a growth of 12.1% in April to 11.2% in May. The current average property price sits at £269,914, equating to an increase of £27,082 from the same time last year.

Nationwide remarked that the property market was faring better than predicted despite the spiralling cost of living and recent mortgage rate increases, but that we should expect to see the rise in home prices slow down in the coming months.

Robert Gardner, Nationwide’s chief economist, said: ‘Despite growing headwinds from the squeeze on household budgets due to high inflation and a steady increase in borrowing costs, the housing market has retained a surprising amount of momentum.

 ‘Demand is being supported by strong labour market conditions, where the unemployment rate has fallen towards 50-year lows and the number of job vacancies is at a record high.

 ‘At the same time, the stock of homes on the market has remained low, keeping upward pressure on house prices.

 ‘We continue to expect the housing market to slow as the year progresses. Household finances are likely to remain under pressure, with inflation set to reach double digits in the coming quarters if global energy prices remain high.

 ‘Measures of consumer confidence have already fallen towards record lows. Moreover, the Bank of England is widely expected to raise interest rates further, which will also exert a cooling impact on the market if this feeds through to mortgage rates.’

Since the beginning of the pandemic, house prices have seen such a rapid increase that, when compared with the average income, the cost of buying property has never been higher. This impacts affordability and has resulted in many potential buyers being totally priced out of the market.

The ratio of earnings to house prices has increased from a long-term average of 4.5 to an alarming 7 times.

Previously, buyers have been able to take advantage of low-interest rates to buy more expensive homes; however, with the recent interest rates being increased four times in succession by the Bank of England, from 0.1% to 1%, affordability has taken a serious hit.

Over just a year, fixed interest rate deals as low as 1% have risen to just under 2.5% for a similar mortgage. This impacts negatively on the amount buyers are able to borrow, particularly at this time when the cost of living expenses and the energy crisis are already affecting how much people can spend.

Jamie Lennox, director at Norwich-based mortgage broker Dimora Mortgages, said: ‘The tide could be turning as a number of clients who have been house hunting for the past six months are now finally getting offers accepted where, before, they were consistently being outbid by other buyers.

‘A lot of buyers are currently committed to the idea of moving, but once they finally complete, we believe the housing market could start to dramatically change with a lack of new people considering moving.’