UK house prices fall at fastest rate since June 2020

House prices in the UK have fallen by the largest amount month-on-month since June 2020.

The latest figures from the Nationwide House Price show monthly prices fell 1.4% in November, coming off the back of a 0.9% fall the previous month. 

Year-on-year growth also fell to its lowest rate for at least two years, with growth dropping to 4.4% from 7.9% the previous month.

The month-on-month price fall is the biggest since June 2020 – after a 0.9% drop in October, the building society said. 

The average UK house cost £263,788 in November compared to £268,282 in October. Robert Gardner, Nationwide’s chief economist, said the slow down in house price growth was because of the ongoing impact of September’s mini-Budget. 

“The fallout from the mini-Budget continued to impact the market [in November],” Gardner said. 

He added: “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 had become much more “stretched”, Gardner explained.

Mortgage rates fell last month after they topped 6% for a two-year fixed mortgage for the first time in 14 years. Five-year fixed mortgage rates went back down from 6.51% in October to 5.95% in November, according to website Moneyfacts.co.uk.  

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Gardner predicted that the market would remain “subdued in the coming quarters” with inflation likely to remain high for some time and the interest base rate likely to rise again. 

The Consumer Prices Index showed inflation rose by 9.6% in the 12 months to October 2022. The Bank of England increased the interest base rate to 3% last month. 

Gardner added: “The outlook is uncertain, and much will depend on how the broader economy performs, but a relatively soft landing is still possible.”