House prices fall at fastest rate in over two years: Nationwide | Mortgage Strategy

Img

House prices in the UK fell 1.4% on a monthly basis in November, which is the largest drop since June 2020, new Nationwide data shows.

On an annual basis, it adds, house prices rose 4.4%, which compares to a 7.2% rise in October.

This puts the average price for a home in the UK at £263,788.

“The market looks set to remain subdued in the coming quarters,” says Nationwide chief economist Robert Gardner, adding: “Inflation is set to remain high for some time and [the] bank rate is likely to rise further as the Bank of England seeks to ensure demand in the economy slows to relieve domestic price pressures.

“The outlook is uncertain, and much will depend on how the broader economy performs, but a relatively soft landing is still possible.”

Hargraves Lansdown senior personal finance analyst Sarah Coles comments: “Kwasi Kwarteng’s ill-fated budget, caused a horrible spike in mortgage rates, which spooked the market, and buyers deserted in droves. Zoopla figures have shown that demand plummeted 44% in the following months.

“We’re not seeing anything like the full impact of this in the figures, because on average it takes around three months to complete a sale, so it’s likely to include only around a week of sales agreed after mortgage chaos was unleashed.

“Even at that point, sales being settled were highly likely to have been funded by mortgages agreed well before everything kicked off, so all we’re seeing is the effect of a sudden and possibly catastrophic loss of confidence.

“In theory, buyers always knew rates would rise, because they were already on their way up. However, the speed and scale of the hikes made them all-too aware of the risk. Meanwhile, fear spread that prices could be on their way down before long.”

The Zoopla data Coles references was covered earlier this week.

And Barrows and Forrester managing director James Forrester says: “Whilst a 1.4% drop is the largest fall in two years, and despite many commentators and so-called experts in recent weeks seemingly encouraging meltdown within the property market, the latest figures show we are now merely starting to see a steady return back to pre-pandemic normality.

“The measured pace back to a balanced market should be celebrated yet also met with the reality that we are not seeing, nor will we see, a housing market crash.

“Although we are now seeing a slight reduction in price growth, with perhaps temporary and marginal price decline to follow as the market normalizes again, grinch-like forecasts and fears of a property market crash should be put to bed as fixed rate mortgage costs now reduce as an early Christmas present for homeowners.

“With dwindling economic headwinds in 2023, we expect the property market to perform well.”


More From Life Style