Average house prices are still unaffordable for the typical earner, the UK’s largest building society has said.
Despite wages rising above the rate of inflation in recent months and house prices falling from the record high of summer 2022, “housing affordability is still stretched”, Nationwide said.
A greater proportion of take-home pay is going on mortgage bills, according to the lender’s house price index.
Someone earning the average UK income seeking to buy their first home with a deposit worth 20% of the asking price will have a monthly mortgage bill of 37% of their end pay packet.
It’s above the long-standing average of 30%.
The mortgages affect
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While people have been typically earning more and house prices are 3% lower than the all-time high two years ago, rising mortgage costs have made unaffordability worse.
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Lloyds Banking Group chief executive Charlie Nunn said the era of ultra low interest rates is over.
With high interest rates – raised to 5.25% by the Bank of England to bring down inflation – have come more expensive mortgage costs.
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According to Nationwide, the interest rate on a five-year fixed-rate deal for a borrower with a 25% deposit was 1.3% in late 2021. That has soared and is now around 4.7%.
Latest official figures showedbasic pay grew 6%in the three months to April, while inflation – the rate of price rises – was 2.3% in the same month. But data from living-standards thinktank the Resolution Foundation said weekly wages have increased by just £16 in 14 years when inflation is factored in.
Compounding affordability problems is the fact UK house prices are back on the rise and were 1.5% more last month compared to June 2023.
Fewer mortgages, more cash
There have been fewer house-buying transactions over the past year, Nationwide added.
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The total number of transactions is down by roughly 15% compared to the pre-pandemic year of 2019.
Higher borrowing costs have meant transactions involving a mortgage are down even more, nearly 25%.
Cash transactions, however, are up 5% on pre-pandemic levels.
Figures released by the Bank of England on Monday morning showed mortgage approvals continued to fall.
House sales are likely to fall as the number of mortgages approved dropped to 60,000 in May from 60,800 in April.
Would-be buyers borrowed half the amount of money to purchase a home, the Bank said, £1.2bn was loaned in May, down from £2.2bn in April.
The same data showed that personal lending, such as credit card debt and personal loans, grew. It suggests increased consumer demand.
The region with the fastest house price growth was Northern Ireland at 4.1% across the three months of April to June, while it became 1.8% cheaper to buy a house in East Anglia over the year, according to Nationwide figures.
Women taking weight loss jabs must use contraception, and wait up to two months after stopping the medication before trying to get pregnant, the government’s health agency has warned.
The Medicines and Healthcare products Regulatory Agency (MHRA) has issued a warning around the use of GLP-1 medicines, which are used both for weight loss and to treat diabetes.
It says the glucagon-like peptide-1 receptor agonists (GLP-1 or GLP-1 RAs) must not be taken during pregnancy, while trying to pregnant or while breastfeeding. Women who are attempting to get pregnant have been warned to stop using the medicine for two months before trying to have a baby.
It is because there is not enough safety data to know whether taking the medicine could cause harm to the foetus.
The MHRA said it has received 40 reports relating to pregnancy among women taking the jab.
Mounjaro has also been found to reduce the effectiveness of oral contraceptives in those who are overweight. This means anyone using the jab should also use condoms, particularly during the first four weeks and after any dose increase.
The weight loss jabs have been linked with a “baby boom”, with women reporting online they have surprise pregnancies, despite using contraception – nicknaming them ‘Ozempic babies’ or ‘Mounjaro babies’.
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MHRA data found 26 pregnancy-related reports for women taking Mounjaro. Women do not have to specify in the report if the pregnancy is unintentional, but one did say as such.
There were eight reports relating to people taking Ozempic and Wegovy and a further nine for Victoza or Saxenda, with one woman saying her pregnancy was accidental.
Dr Alison Cave, MHRA Chief Safety Officer said the “skinny jabs” were medicines, and “should not be used as aesthetic or cosmetic treatments”
“They are not a quick fix to lose weight and have not been assessed to be safe when used in this way,” she said.
She urged patients to read in the information leaflet, or have a conversation with a healthcare professional as part of the prescribing process.
A collision between an electric bike, a pedestrian and a car has left a teenager dead and another in hospital with serious injuries.
Emergency services responded shortly after 4.50pm on Wednesday to reports of an accident on Staniforth Road in the Darnall area of Sheffield.
A 16-year-old pedestrian was taken to hospital. Despite emergency treatment, he died as a result of his injuries. The boy’s family has been informed and are being supported by specialist officers.
An 18-year-old man, who was the rider of the electric bike, is also in hospital with serious injuries.
It is reported that the car involved, a grey Audi, failed to stop at the scene. Police say an investigation into the collision is underway and a man and woman in their forties have been arrested on suspicion of assisting an offender. They remain in custody.
Detective Chief Inspector Andy Knowles said: “We know that this incident will have caused significant concern in the local community, and tonight our thoughts are with the boys loved ones following this tragic incident.
“Our investigation into what happened is continuing at pace and we currently have a scene in place on Staniforth Road as we continue to piece together the circumstances.
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“We are aware of speculation being shared online, as well as footage of the incident, and we ask members of the public to withhold from speculating or sharing footage which may cause distress to the boy’s family.
“If you have any footage, imagery or information that may assist our investigation then please share this with us – it may form an important part of our investigation.”
The watchdog that examines potential miscarriages of justice has “unimpressive” leadership and is “incompetent”, said its new chair as she takes up her role.
Dame Vera Baird has been appointed to head up the Criminal Case Review Commission (CCRC), which currently has serial child killer Lucy Letby’s appeal in its inbox.
The CCRC is an independent public body that reviews possible miscarriages of justice in the criminal courts of England, Wales and Northern Ireland and refers cases to the appeal courts.
The commission has had four critical reviews in the last 10 years, which Dame Vera said “all find the same thing”.
Image: Andrew Malkinson. Pic: PA
Speaking to Sky News after her appointment was announced, she said: “They don’t communicate with applicants, are reluctant to challenge the Court of Appeal, they look for reasons not to refer rather than to refer and are quite often incompetent.”
He had applied three times to the CCRC but was rejected twice on cost-benefit grounds.
It’s one of several cases leading to calls for “root and branch” reform of the CCRC from the Justice Committee, which said the watchdog “has shown a remarkable inability to learn from its own mistakes”.
An inquiry by Chris Henley KC also found that case workers missed multiple opportunities to help Malkinson.
The previous chair, Helen Pitcher, was forced to resign in January and chief executive Karen Kneller told the committee of MPs they needed a strong replacement.
Ms Kneller said in April: “We don’t have that figurehead and without that figurehead I think it is difficult for the organisation.”
But that replacement did not think much of her evidence to MPs.
“I didn’t find her impressive,” said Dame Vera, who will be meeting her new colleague next week.
“I was really quite concerned about, first of all, the kind of fairly sketchy way in which she even allowed that they got it wrong in Malkinson, and these assertions that she was sorry that people only judged them by the mistakes, and they all took them very seriously, but actually they were otherwise doing a very good job.
“My fear is that the attitude in the case of Malkinson and others, points to there being an attitude that’s not positive, that’s not mission-driven, that is not go-getter in other cases. So, are they getting it done properly?”
A month later, a committee of MPs said Ms Kneller’s position was no longer tenable.
Committee chairman Andy Slaughter said: “As a result of our concerns regarding the performance of the CCRC and the unpersuasive evidence Karen Kneller provided to the committee, we no longer feel that it is tenable for her to continue as chief executive of the CCRC.”
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Why do medical experts think Lucy Letby is innocent?
In February, the CCRC received an application from Lucy Letby, the former nurse convicted of murdering seven babies and attempting to murder seven others. It’s a high-profile, complex case, arriving at a significant moment of flux.
Image: Serial child killer Lucy Letby
Asked if she thought the CCRC could deal with it, Dame Vera said: “Remember I’m quite new to it. It will need complexity. It will need a team. It will need the readiness to commission reports, I would guess from what’s been said about the lack of scientific value in some of the things that were asserted.
“So it’s going to be a very complex task.”
In the Baird Inquiry into Greater Manchester Police last year, Dame Vera strongly criticised the force. She has a reputation for exposing hard truths to institutions, but now she is the institution. She will need to drive the changes.