UK house prices see biggest fall for two years – Nationwide
According to Nationwide, rising interest rates discouraged buyers, leading to the largest monthly decline in house prices in the UK in more than two years in November.
The largest month-over-month decrease in prices since June 2020 was 1.4 per cent in comparison to October.
Nationwide says annual house price growth experienced a “sharp slowdown,” falling to 4.4% from 7.2% in October.
The lender also stated that the housing market appeared to “remain subdued” for the foreseeable future.
As affordability issues weigh on demand, the official forecaster for the government predicted earlier this month that house prices would fall by 9% over the next two years.
According to Nationwide, the housing industry was still being impacted by the mini-budget of September, which led to an increase in mortgage rates and the suspension of hundreds of mortgage products by lenders amid financial market turmoil.
Nationwide’s chief economist, Robert Gardner told BBC’s Today programme: “A lot of this reflects the fallout of the mini-Budget and the big rise that we saw in mortgage rates because that really did change the affordability calculations for prospective buyers and really made things a lot less affordable.”
He added: “If you look at the typical mortgage payment as a share of someone’s take-home pay, for the typical first-time buyer that was running at close to long-run averages of 30%. But as a result of the mini-budget it’s moved up to around 45% of take-home pay, which is clearly a massive difference.”
The market is likely to remain under pressure for a while longer yet, as inflation is set to remain high and the Bank of England is likely to raise interest rates further.
