Annual house price growth slowed in October as values fell in London – ONS

Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “Rent inflation has eased dramatically since the heady days of 2024, and rents are rising at their slowest pace for three and a half years.

“However, given how they’ve moved over the past couple of years, millions of people are still facing incredibly hefty monthly bills.

“Average bills have reached £1,366 and in London it’s £2,271. As landlords continue to sell up, we can expect rents to remain painful.

“ONS data earlier this month showed English rents remain higher than their equivalent mortgages, at an average of £250 a week compared to £242.

“Given that tenants have lower incomes on average, the rent swallows far more of their monthly budget – at 39 per cent compared to 19 per cent among those with a mortgage.

“It’s no wonder that the HL Savings and Resilience Barometer shows they have an average of just £39 left at the end of the month.

“Annual house price rises fell again to 1.7 per cent – so they’re growing significantly more slowly than inflation.

“Price changes vary significantly across the country. In the North East, prices are up 5 per cent in a year. Meanwhile, in the South East, they’re growing at less than 1 per cent, and in the South West and London they’re actually falling.

“When house prices fall it affects wannabe downsizers, who are relying on the equity in the home to supplement their retirement income.

“It also dents the confidence of homeowners, who feel less well off, and may hold back on spending as a result.

“Given how sluggish economic growth is right now, this could spell more bad news for the economy. The only people likely to be celebrating are those moving up the property ladder and first-time buyers.

“If you’re poised for a purchase, and your deposit is sitting in a competitive savings account, it could be earning more than 4 per cent at the moment – outstripping the pace of average rises and price inflation too.

“The more you can make on these savings while you’re waiting to make a purchase, the better position you will be in when it’s time to buy, so it’s worth checking online banks and savings platforms for the best available deals.”