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Signs of house price slowdown may be good news for UK graduates

Published: Wednesday, 06 June 2007   Category: Life after graduation

Fears that recent UK graduates may find it increasingly hard to step on to the housing ladder may be allayed as UK house prices slowly look to be losing steam.

Affordability for recent UK graduates and other first-time buyers has significantly worsened in recent years, but the effect of four interest rate rises in the last twelve months now looks to be bearing some fruition on the country's housing market.

With the Bank of England's base rate now standing at a six-year high, and various recent figures showing a slight slowing in growth rates, many property experts are now suggesting that the market has reached a 'tipping point', after which professional accommodation may begin to become more affordable for recent graduates.

"The MPC have administered medicine in order to curb inflation, which has had the resultant effect of beginning to rapidly cool the housing market," commented Paul Holmes, operations director at property specialists Firstrung.

"However, it would be premature of first-time buyers to believe that a first-time buyers market is finally here," Mr Holmes warned.

"The base rate may have to reach six per cent or higher to curb the inflationary effects caused by the huge growth in money supply over the past six years."

An increasing number of UK graduates have been forced to move back home after leaving university in recent years, after finding themselves priced out of the market during the early stages of their careers.ADNFCR-1068-ID-18171603-ADNFCR

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