UK house prices record sharp fall in January - Nationwide
UK house prices fell for the fifth month in a row, with annual price growth slowing to 1.1% in January as surging interest rates and inflation continued to hammer mortgage holders, according to figures released by lender Nationwide on Wednesday.
The average sale price fell 0.6% to £258,297 in January compared with £262,068 in December.
Nationwide’s survey comes as the Bank of England is expected to raise interest rates by half a percentage point to 4% on Thursday, which will add pressure to mortgage payers already struggling with soaring inflation.
Mortgage approvals fell to their lowest level in two and a half years in December as higher borrowing costs took their toll on the property market.
Banks and building societies authorised 35,612 home loans during the month, the fewest since May 2020 when the housing market was shut due to the coronavirus pandemic, according to the Bank of England.
"There are some encouraging signs that mortgage rates are normalising, but it is too early to tell whether activity in the housing market has started to recover," said Nationwide chief economist Robert Gardner.
"It will be hard for the market to regain much momentum in the near term as economic headwinds are set to remain strong, with real earnings likely to fall further and the labour market widely projected to weaken as the economy shrinks.”
Reporting by Frank Prenesti for Sharecast.com