UK house prices suffer biggest monthly fall since October 2008 - Halifax

UK house prices suffered their biggest monthly decline in November since the global financial crisis in October 2008, amid rising mortgage rates, according to a survey released on Wednesday by lender Halifax.

House prices fell 2.3% on the month following a 0.4% drop in October, with the average price of a house standing at £285,579, down from £292,406.

On the year, meanwhile, prices rose 4.7% in November, down from 8.2% growth the month before. The rate of annual growth slowed in all regions bar the North East, where it edged up to 10.5% from 10.4%.

Kim Kinnaird, Director of Halifax Mortgages, said: "While a market slowdown was expected given the known economic headwinds - and following such extensive house price inflation over the last few years (+19% since March 2020) - this month’s fall reflects the worst of the market volatility over recent months.

"Some potential home moves have been paused as homebuyers feel increased pressure on affordability and industry data continues to suggest that many buyers and sellers are taking stock while the market continues to stabilise.

"The market may now be going through a process of normalisation. While some important factors like the limited supply of properties for sale will remain, the trajectory of mortgage rates, the robustness of household finances in the face of the rising cost of living, and how the economy - and more specifically the labour market - performs will be key in determining house prices changes in 2023."

Andrew Wishart, senior property economist at Capital Economics, said the data confirms "that the house price correction that we forecast has begun".

"While mortgage rates have fallen back somewhat in recent weeks, they remain too high for demand to recover and prices to bottom out anytime soon."

Victoria Scholar, head of investment at Interactive Investor, said: "We are coming off the back of heightened property price inflation, with those upward pressures finally starting to ease as a result of rising mortgage rates, a looming recession and the cost-of-living crisis. However limiting this to some extent is the chronic shortage of housing supply in the UK economy, that is stemming sharper declines.

"Many potential house buyers are waiting for mortgage rates to ease and house prices to soften further into next year before restarting their property searches. The chaos around the mini-budget which sent mortgage rates soaring has also put off potential buyers, who are still hoping that mortgage rates could become more affordable from here."