The slump in UK house prices has deepened after a sharp rise in borrowing costs and the prospect of worse to come dampened demand from would-be buyers, one of the country’s largest mortgage lenders said.
Nationwide house prices fell 3.8% year-on-year in July, the biggest drop since 2009. Economists had expected a 4% drop.
The 13 rate hikes by the Bank of England since the end of 2021 have sapped consumers’ ability to buy a home, data suggest. Markets are currently amid the worst economic slowdown since the global financial crisis more than a decade ago.
“Housing affordability remains tight for those looking to buy a home with a mortgage,” said Nationwide chief economist Robert Gardner.
However, the goal of a relatively soft landing is still achievable.
So far, prices have avoided a possible collapse last fall.
In November, Nationwide warned house prices could fall by 30 per cent in a worst-case scenario.
