Adrian Moloney, sales director of OneSavings Bank, believes a shortage of housing supply is upholding property prices, while buyers continue to walk a tightrope to home ownership.
Mr Moloney was speaking as new figures revealed that the UK average house price rose 5.1 per cent in the year to July but was unchanged on the previous month.
The latest House Price Index figures from the Office for National Statistics (ONS) includes all residential properties purchased for market value in the UK. The data shows that the average price of a home was £226,000 in July; £11,000 higher than July 2016 and up £2,000 on the previous month.
The ONS said house price growth has slowed since mid-2016 but has remained broadly around 5.0 per cent during 2017. And Mr Moloney added: “On the one hand, strong employment growth and historically low mortgage rates are supporting buyer demand, but on the other, stagnant wage growth is being outstripped by consumer prices, making homes less affordable.
"Mortgage approval levels recovered last month, suggesting a small rebound in consumer confidence and affordability, despite the enduring economic unknowns that continue to cloud the long-term view.
“We’re still seeing ripples from the stamp duty increases of 2016, which caused a fair amount of turbulence in the property market, stymieing liquidity by discouraging people from buying or selling their homes.
"A move which has done little to address the underlying supply side issues that continue to fuel the housing crisis.”