The average house price fell by 1.4% month on month in November, marking the biggest drop since June 2020, according to an index.
November’s drop followed a 0.9% month-on-month fall in October.
Across the UK, annual house price growth slowed sharply to 4.4%, from 7.2% annual growth recorded in October.
The average house price fell by 1.4% month on month in November, marking the biggest drop since June 2020, according to an index.
Victoria Jones
The average house price in November was £263,788, Nationwide Building Society said.
Mortgage rates jumped following the mini-budget in September, with Bank of England base rate rises also pushing up borrowing costs, against a backdrop of households being squeezed by rising bills generally.
Robert Gardner, Nationwide’s chief economist, said: “The fallout from the mini-budget continued to impact the market, with November seeing a sharp slowdown in annual house price growth to 4.4%, from 7.2% in October. Prices fell by 1.4% month on month, after taking account of seasonal effects – the largest fall since June 2020.
“While financial market conditions have stabilised, interest rates for new mortgages remain elevated and the market has lost a significant degree of momentum.
November’s drop followed a 0.9% month-on-month fall in October.
Andrew Matthews
“Housing affordability for potential buyers and home-movers has become much more stretched at a time when household finances are already under pressure from high inflation.
“The market looks set to remain subdued in the coming quarters. Inflation is set to remain high for some time and 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.”
Mr Gardner said longer term borrowing costs have fallen back in recent weeks and may moderate further.
“Given the weak growth outlook, labour market conditions are likely to soften, but they are starting from a robust position with unemployment still near 50-year lows,” he said.
“Moreover, household balance sheets remain in good shape, with significant protection from higher borrowing costs, at least for a period, with around 85% of mortgage balances on fixed interest rates.
“Stretched housing affordability is also a reflection of underlying supply constraints, which should provide some support for prices.”