The director of Halifax mortgages, Kim Kinnaird, has said that first time buyers have been looking to smaller homes as a way offset higher borrowing costs.

As interest rates have risen, monthly payments have been rising rapidly, forcing first time buyers to look at smaller properties as a way to get on the ladder.

This growing trend would suggest that house prices at the lower end of the market are likely to see less precipitous falls than those as the top, as competition for cheaper properties seems likely to remain stable or even increase, rather than fall.

With average UK house prices still at 19%, or £45,000 above pre-pandemic levels the difficulties facing first time buyers looks set to continue for some time yet.

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