Aneisha Beveridge of Hamptons said: “Mainly I think it’s a demand-side factor due to the cost of living crisis.” The contrast with the pricier end of the market is huge. Sales of £1m homes in February rose by 40pc year-on-year, despite the end of the stamp duty holiday. Compared with 2019 the jump was 125pc.
Simon Rubinsohn of the Royal Institution of Chartered Surveyors said: “A larger share of the burden of the cost of living crisis will be on people with lower incomes. It will affect the ability of many renters to get on the housing ladder. Their ability to save will be constrained at a time when interest rates are going up.”
One 33-year-old buyer who requested anonymity bought a 30pc portion of a two-bedroom maisonette in Greenwich, London, with her husband three years ago. They bought via the Government’s shared ownership scheme, an affordable homes initiative that allows buyers to purchase a portion of a home and pay rent on the remainder until they can afford to buy it.
The couple have a combined income of £77,000 a year and want to move out of London and buy a £300,000 house near Southampton. But their spending power is disappearing. “We can’t do it without help even though we are already on the property ladder and have good jobs,” the buyer said.
The couple pay £1,000 a month for their three-year-old to go to nursery and £730 in rent and service charges. In April, this bill will jump by £100, an increase of 14pc. Rising food prices mean the cost of their monthly shopping has jumped from £120 to £200. Their energy bills will also shoot up by a third next month and are likely to rise further. “It’s really scary. If our heating bills double, all of our savings will go,” she said.
She has received a 4.9pc pay rise but this falls short of the rate of inflation, which the Office for Budget Responsibilty, the Government’s fiscal watchdog, expects to average 7.4pc this year.