UK house prices tumbled 1.4% in November compared with October, the biggest monthly drop since June 2020, mortgage lender Nationwide said today as the fall-out from September's mini-budget continued.
The drop was much larger than market expectations for a decline of 0.3% and left annual house price growth at 4.4% in November down from 7.2% in October, Nationwide said.
Annual house price growth slowed sharply in November to 4.4% versus 7.2% in October. #housing House prices fell 1.4% month on month. Average house price now stands at £263,788. #houseprices Full report & commentary from our chief economist: https://t.co/PE9wRoeD8r
— NBS External Affairs (@NationwidePress) December 1, 2022
Robert Gardner, Nationwide's chief economist, said: “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.”
“The market looks set to remain subdued in the coming quarters. 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 relieve 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.”
The disruption in the housing market was shown as shares in Mortgage Advice Bureau (Holdings) PLC subsided sharply as it warned on profits after completed business in October and November was 50% lower than expected after the rise in mortgage rates that followed former chancellor Kwasi Kwarteng's 'mini budget'.
The home loan broker expects the "exceptionally low" levels of mortgage activity and new house sales to last into next year, before starting to "slowly build" back again.
READ: Mortgage activity halves in past two months, warns Mortgage Advice Bureau