Biggest drop since 2009 in UK house prices in August

British house prices fell by 5,3% in August

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British house prices fell 5,3% in August from the same month in 2022, the biggest annual decline since July 2009, as higher interest rates dampened demand from buyers, it said on Friday. the Nationwide bank.

On a month-on-month basis, prices fell 0,8% in August, showing the biggest monthly decline since last March, after a 0,3% drop in July, Nationwide data showed.

"The decline is not surprising given the extent of the rise in borrowing costs in recent months, which has resulted in housing market activity well below pre-pandemic levels," said Nationwide chief economist Robert Gardner. .

The Bank of England has raised interest rates 14 times since December 2021, to 5,25%, and financial markets expect another rate hike this month, to 5,5%.

Mortgage approvals were hovering around 20% below 2019 levels, a trend that looks likely to continue, Mr Gardner said.

Nevertheless, Nationwide expects a “soft landing” for the housing market, as it estimates that unemployment will not rise above 5% and that wages are rising rapidly in nominal terms.

Source: KYPE