House prices increased by 2.5% in November despite Budget concerns

Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “Finally there’s some good news for tenants, because rental inflation has fallen again, and is nowhere near as ruinous as it has been in recent years.

“Unfortunately, this has come from an easing of demand rather than a rise in supply, so the fight to secure a rental property remains fierce.

“After so many hikes recently, the average rent is now £1,368, and £2,268 in London, so renters are still going to need to stretch their budgets significantly.

“It’s why the HL Savings & Resilience Barometer shows that on average they’ve only been able to put aside enough savings to cover one month of essential spending – far less than the three-to-six months recommended by advisers.

“The North-South divide is a common phenomenon when the property market is weaker.

“Higher prices in the South mean that when there’s economic weakness and jobs uncertainty, buyers are particularly apt to question whether it’s the right time to be taking a leap of faith in the property market.

“It means sales slow and those buyers who remain drive a harder bargain. It’s why prices are currently falling in London and yet are up 6.8 per cent in the North East over the year.

“Historically, this has tended to spread over time, so that weakness seeps into the market across the country.

“However, a further slowdown is not nailed on, because despite concerns about the wider economy, mortgage rates are still falling and wages are still rising ahead of house prices.

“We will need to see whether this injects more enthusiasm into the market in January, pushing prices up more quickly.

“If you are holding money in a Lifetime ISA, waiting for the right time to buy, the good news is that the government has confirmed that you can keep paying into these as normal, and they will still offer bonuses after the scheme closes to new entrants.

“It means that if the property you want is worth less than £450,000, there’s nothing stopping you topping up your LISA this tax year and getting up to £1,000 from the government to boost your deposit further.”