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House price growth softens in January says Nationwide: "Saving for a deposit is like constantly swimming upstream"

ended 31. January 2025

The annual rate of house price growth slowed to 4.1% in January, compared with 4.7% in December, according to the Nationwide. House prices were up 0.1% month on month. Newspage asked property and mortgage experts for their views, below.

9 responses from the Newspage community

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Katy Eatenton
Mortgage & Protection Specialist at Eatenton Finance
Affordability continues to be an issue for many prospective borrowers as does finding a deposit. With rents so high, saving for a deposit is like constantly swimming upstream. Slightly higher mortgage rates have been a theme in January following the bond market turbulence earlier on in the month. In spite of that, activity levels have been robust all the way up the property ladder as people are always keen to be in their new homes in late spring or early summer.
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Stephen Perkins
Managing Director at Yellow Brick Mortgages
Despite the annual rate of growth dipping, it's been an energetic January compared to last year, with demand and enquiry levels resilient overall. Demand has not been dampened despite a lack of economic confidence and the reality that virtually no non-auction transactions starting now will complete prior to the Stamp Duty changes in April. We expect house prices to continue to hold their own with no signs of abating. There's simply too much demand and nowhere near enough supply. As ever, affordability remains an issue as does finding a deposit given the high level of rents.
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Jonathan Moser
CEO at Mo'Living
London’s property market has been relatively active in January, but affordability issues persist for first-time buyers. The supply of homes for sale has increased slightly, creating more of a buyers’ market. Sellers are becoming more flexible on price and buyers are using this to negotiate better deals, especially for properties that have been on the market for extended periods. The challenge first-time buyers face is the fact that units being sold off by amateur landlords are being snapped up by professional landlords who see a bargain. In many cases they have the firepower that first-time buyers do not. We’re also seeing the introduction of VAT on independent school fees starting to influence where people choose to buy. Another clear trend is that energy-efficient homes can command a decent premium. Insulating your home can insulate you from lower offers when selling. Despite the many headwinds the economy is facing, London’s property market will always prove resilient long-term.
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Ranald Mitchell
Director at bad credit mortgage specialists Charwin Mortgages
In January, the property market had real momentum. Demand is steady, stock remains tight and buyers are pressing on despite affordability challenges. First-time buyers and movers are still battling deposit and affordability hurdles, but stabilising rates and looming stamp duty changes are keeping them in the game. Meanwhile, remortgaging is surging—not just for rate switches, but as homeowners tap into equity for everything from renovations to debt consolidation. Buyers may be cautious, but they’re active—and if January is a sign of things to come, 2025 is set to be a big year for the market.
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Andrew Montlake
CEO at Coreco
The Bank of Mum and Dad has never been as important. Finding a deposit is a permanent struggle for first-time buyers. In January, there were expectations for a buoyant start to the year and for lenders to come out firing but the bond market sell-off injected some serious uncertainty into the market. It wasn't the start to 2025 that many were hoping for and the focus is now turning to the Bank of England's next Monetary Policy Commitee meeting on 6 February. The economy is in terrible shape and businesses and consumers alike need rate cuts to take off some of the pressure.
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Emma Jones
Managing Director at Whenthebanksaysno.co.uk
House prices rose very slightly on the month according to the Nationwide but January has been overshadowed by uncertainty in the markets and many lenders repricing up. Borrowers will be looking to the Bank of England to deliver rate cuts and potentially send mortgage rates down again. The economy is facing countless headwinds that will strengthen once many of the tax changes announced in the Budget go live. There's still demand but we need lower rates to really get the market moving. For many would-be homeowners, the only way to save for that deposit is to turn to their family.
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David Stirling
Independent Financial Adviser at Mint Wealth
Winter has brought a cooling in house prices, as reported by Nationwide, which comes as little surprise given the current economic climate. With the anticipated rate war between lenders failing to materialise, first-time buyers are being left out in the cold. Struggling to save for deposits amid rising living costs, many are finding it impossible to break free from the cycle of renting. With average house prices now demanding around 5.5 times the average income, it seems many will remain on the rental merry-go-round for the foreseeable future.
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Rohit Kohli
Director at The Mortgage Stop
While the slowing rate of growth may suggest some short-term stabilisation, the core issue remains unchanged: housing supply is fundamentally constrained, and until this is addressed, prices are unlikely to see sustained downward pressure. For first-time buyers, this ongoing imbalance is a major hurdle. With affordability already stretched, any further slowdown in the property market could dampen broader economic growth, making recovery in the wider economy even tougher.
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Iain Swatton
Director at Exemplar Financial Services
The slowdown in house price growth doesn’t mean buyers have lost interest—it’s a sign of affordability challenges biting hard. Mortgage costs remain high, and saving for a deposit is still a huge hurdle. Family support, through gifted deposits is becoming an increasingly important route to homeownership. As we move through 2025, this trend is likely to grow, especially as buyers wait for more meaningful improvements in mortgage affordability.