An uncertain economic outlook from Brexit and squeeze on household budgets sees house prices at slowest growth since May 2013.

Growth in UK house prices has slowed to a five year low of 1.6% per annum and is flat for the month according to the latest report from Nationwide Building Society.

Robert Gardner Nationwide Chief Economist said, the average cost of a home in the UK is £214,534 and we expect house prices to rise by around 1% over the course of 2018.

The flat level of house prices is good news for first time buyers as this gives them time to build a deposit or see a rise in their income to get on the property ladder.

For home movers wanting to trade up with slow house price growth, this means they have more time and opportunity to raise the deposit for a larger property.

First time buyer numbers recover

The number of first time buyers in the market have recovered to pre-crisis levels with the support from improved credit availability including government schemes such as Help To Buy.

Interest rates remain close to historic lows with lenders offering a large number of fixed rate deals and improvements in the labour market have helped to boost activity.

The housing market remains relatively subdued with the number of transactions little changed at 1.2 million in the twelve months to September 2018 and remain 30% below level in the same period of 2007.

In addition home mover activity has remained subdued which could be due to factors such as uncertainty in the economy with Brexit and lack of supply of suitable homes on the market.

Older homeowners may add to the lack of suitable homes as equity release mortgage buyers avoid downsizing and stay in their home, accessing wealth to help maintain their standard of living or gift a child or grandchild the deposit on their first home.

The lack of properties could mean remortgage buyers staying in their existing home and release capital using their mortgage which they can use to improve their house.

Buy-to-let investor numbers slump

The number of buy-to-let investors purchasing a property using a mortgage has seen a significant reduction in recent years due to changes in tax and underwriting standards.

In April 2016 Stamp Duty Land Tax (SDLT) for new buy-to-let properties increased by an extra 3% on the whole purchase value and this applies to people buying a second home.

The following table shows the level of stamp duty paid by residential purchases and buy-to-let landlords:

Property value	Standard rate	Buy-to-let rate
Up to £125,000	0%	3%
£125 - £250,000	2%	5%
£250 - £925,000	5%	8%
£925 - £1.5m	10%	13%
over £1.5m	12%	15%

For residential properties the first £125,000 is free from stamp duty but for landlords the new tax is 3% or an extra £3,750 which helps first time buyers.

The number of cash buyers has remained remain buoyant and have done so since the financial crisis as they were less impacted by tighter credit and the deteriorating labour market at the time.

During the recovery cash buyers increasingly owned their own home outright and therefore did not need mortgages when moving home.

What are your next steps?

Call our LCM mortgage brokers if you are a buy-to-let landlord with a property, remortgaging and want the best mortgage deal, buying your first home or you are planning to move home.

Learn more by using the mortgage cost calculators, property value tracker chart and equity release calculator. Start with a free mortgage quote or call us and we can take your details.

For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your home to spend on anything such as repay an interest only mortgage or pay for care at home.