Rise in borrowing costs yet to signficantly hit sentiment, says Nationwide

House prices rose 0.1% in June compared to the previous month, according to Nationwide’s monthly index.

The lender said however that prices are down 3.5% compared to June last year, which comes on the back of a similar, 3.4% fall the previous month.

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Robert Gardner, chief economist at Nationwid,e said the recent rise in longer term borrowing costs have “yet to have the same negative impact on sentiment” as similar rises in the wake of the mini-budget last year. He said the number of mortgage applications has yet to decline.

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However, Gardner warned: “The sharp increase in borrowing costs is likely to exert a significant drag on housing market activity in the near term. For example, for a representative first-time buyer earning the average wage and buying the typical property with a 20% deposit, mortgage payments as a share of take-home pay are now well above the long-run average”