20 Jul New ONS data: how best to save for a house in turbulent property market
Savings experts have revealed how to navigate saving for a house as rising mortgage interest rates see prices start to fall, following a national spike earlier this year.
Data released by the ONS today shows that average UK house prices increased by 1.9% in the 12 months up to May this year, surging to £304,000 in England (1.7%), £213,000 in Wales (1.8%), £193,000 in Scotland (3.2%) and £172,000 in Northern Ireland (5.0%).
This means that in previous months savers have been faced with an impenetrable property market and needed to save more, on top of the financial pressures from the ongoing cost of living crisis.
However, more recent data from Rightmove shows that sky-rocketing mortgage interest rates are starting to see house prices fall – reducing for the second month in a row, by 0.2% in July.
According to Bank of England reports, this trend is expected to continue, with experts predicting another rise of at least £500 a month for nearly one million households by the end of 2026, potentially driving property prices down further.
Savings experts at money.co.uk/savings-accounts today revealed how those looking to get on to the property ladder can best save for a house in the ever-shifting property market.
Lucinda O’Brien, expert at money.co.uk savings accounts, said: “Buying a home is likely the biggest purchase you will ever make and will have the biggest impact on your long-term savings, so due diligence is key when making these big purchases.
“It is particularly important to ensure you compare first time buyer mortgages to get the best deal for you. You can get help comparing these at money.co.uk/mortgages.
“As always, it is most important at whatever stage of saving you’re at, to ensure your deposit money is in a high interest account to boost your savings – different banks offer different rates so shop around for the best rates on offer. At the moment, some are offering almost 5% on instant access savings accounts, allowing you flexibility to take your money out at the moment you need it.
“ISAs are particularly good for saving for a home, as they allow buyers to save money tax-free – with a lifetime ISA specifically catered for this savings goal. ISAs do come with an allowance though, so you’ll have a limit on how much you can save each year. You can learn more about this type of savings account and compare rates at money.co.uk/savings-account.”
