House prices fell by an average 1.1 per cent over the past year - the first annual decline since June 2020, according to Nationwide.
Prices fell 0.5 per cent month-on-month - the six mon they drop in a row - and the typical UK home now costs £257,406.
This means prices are 3.7 per cent below their August 2022 peak.
“The recent run of weak house price data began with the financial market turbulence in response to the mini-budget at the end of September last year. While financial market conditions normalised some time ago, housing market activity has remained subdued” says Nationwide’s chief economist Robert Gardner.
“This likely reflects the lingering impact on confidence as well as the cumulative impact of the financial pressures that have been weighing on households for some time. Indeed, inflation has continued to outpace wage growth and mortgage rates remain significantly higher than the lows recorded in 2021.”
At the end of last year Nationwide forecast that house prices would fall an average 5.0 per cent in 2023 and earlier this week a Reuters poll of analysts predicted a more modest 2.4 per cent drop.
Meanwhile separate figures released by the Bank of England show that lenders approved the lowest number of mortgages in January since 2009, excluding a slump at the start of the pandemic.
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “There is no question that house prices are more sensitive in response to cost of living and employment concerns.
“However, reports of the demise of the housing market are premature – inflation and mortgage rates are stabilising whereas buyers have more choice so the equity-rich in particular are recognising their increased bargaining power by trying to get the best deals possible.”
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After the huge increases over the last 2 years it's not really a big fall is it?
Agree, but it shows a pattern and if the current economic situation continues I can see them dropping some more.
I am very surprised but so far nothing seems to be dropping locally. Although I guess 1.1% would not be noticeable. I am meeting my estate agent next week to look at selling a property and I am also viewing a property to buy, so it will be interesting to see what's happening from personal experience.
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