House prices are set to rise at a slower rate than incomes over the next two years despite remaining generally unaffordable, according to research by a property market company. Zoopla said property value inflation would remain muted between 2024 and 2026 compared to wages but prices would stay around 20,000 above affordable levels.
However, rising incomes and longer mortgage terms are helping to improve affordability, meaning the over-valuation of properties is expected to have disappeared by the end of the year, the website said.
Buyers using mortgages are also relying on longer mortgage terms to gain that extra few percentage points of buying power to afford a home.
Meanwhile, three million households will see an increase in mortgage repayments between now and the end of 2026, with around 400,000 homeowners seeing a rise of more than 50 per cent, the Bank of England said.
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