House prices fall at fastest rate since mid-2020
By Abigail Townsend
Date: Thursday 01 Dec 2022
(Sharecast News) - UK house prices fell in November, a closely-watched survey showed on Thursday, as the fallout from the government's disastrous mini-budget continued to reverberate.
According to the latest Nationwide House Price Index, prices fell by 1.4% month-on-month in November, the biggest decline since June 2020. In October, they eased 0.9%.
On an annual basis, UK house price growth was 4.4% last month, sharply down on October's 7.2% increase. The average price of a house in the UK is now £263,788.
The 23 September mini-budget - which included large, unfunded tax cuts but no spending plans or economic forecasts -sparked turmoil across markets, sending mortgage rates sharply higher and lending to the temporary withdrawal of some offers.
Robert Gardner, chief economist at Nationwide, said: "The fallout from the mini-budget continued to impact the market.
"While financial market conditions have stabilised, interest rates for new mortgages remain elevated and the market has lost a significant degree of momentum. 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."
Looking ahead, Gardner said the housing market was likely to remain subdued.
"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 relive 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."
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