Nationwide Building Society has issued a dire warning to prospective homebuyers as property affordability has been "stretched" due to rising mortgage rates.
Homeowners and those hoping to get on the property ladder have been forced to contend with sky-high prices and interest rates in recent years.
The Bank of England's decision to raise, and hold, the country's base rate to 5.25 per cent has had a knock-on impact on mortgages.
According to Nationwide, despite earnings rising faster than house prices as of late, this has not been enough to ease the cost of becoming a homeowner.
This assessment comes as house price growth was found to be "broadly stable" in June by Nationwide, with prices up 0.2 per cent from the month before.
As it stands, the average house price in the UK is sitting at £266,065, based on data from the building society.
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The building society is reminding Britons to be cautious when it comes the property market
NATIONWIDE BUILDING SOCIETYHouse prices jumped by 1.5 per cent from a year earlier, however Nationwide claims external activity in the wider marker has been broadly flat over the period.
In the last five years, property transactions have plummeted by around 15 per cent.
Homebuyers are still being detrimentally impacted by hiked mortgage rates resulting from the central bank's decision-making.
Since 2021, the Bank has raised interest rates as part of its effort to bring down inflation to its desired target of two per cent.
For the 12 months to May 2024, the consumer price index (CPI) rate of inflation fell to this level but the Bank of England has held off on implementing an immediate rate cut.
As such, homeowners and buyers will likely have to wait longer for any immediate mortgage relief.
Robert Gardner, Nationwide's chief economist, urged Britons to be aware of the current state of the property market.
He cited that mortgage interest rates are "still well above the record lows prevailing in 2021 in the wake of the pandemic".
Garnder explained: "For example, the interest rate on a five-year fixed rate mortgage for a borrower with a 25 per cent deposit was 1.3 per cent in late 2021, but in recent months this has been nearer to 4.7 per cent.
"As a result, housing affordability is still stretched."
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The Bank of England has continued to hold the Base Rate at 5.25 per cent since August 2023 GB NEWSExperts are pricing in an interest rate reduction from the UK's central bank in the latter half of the year.
Sarah Coles, head of personal finance at Hargreaves Lansdown, explained: "Buyers may find their mojo again when we get a rate cut from the Bank of England.
"This could come as early as August, although sticky services inflation and higher wages could mean we need to wait until the autumn.
"Either way, we’re not expecting massive overnight drops in mortgage rates, so the reaction is more likely to be a muted upturn in sentiment than an overwhelming wave of optimism."