Tag: Nationwide

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UK house prices fall as lenders raise mortgage rates

House lenders increase rates

House prices declined in April 2024, with affordability pressures persisting for potential buyers, as reported by Nationwide.

The UK’s largest building society reported a 0.4% decrease in house prices compared to the previous month. The average cost of a home now stands at £261,962, which is 4% lower than in the summer of 2022 peak.

According to the report, the increase in borrowing costs was a significant factor in the recent drop in prices.

In recent days a string of lenders raised rates on new fixed-rate mortgage deals.

The rise was driven by expectations that the Bank of England (BoE) would implement fewer and more gradual interest rate reductions.

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UK house prices 1.8% lower in 2023, says Nationwide

House prices down in 2023 says Nationwide

House prices have ended the year 1.8% lower in the UK, according to Nationwide Building Society

The Nationwide forecasts no growth or a further fall in 2024.

The lender said the average house price across the UK was £257,443 in December 2023. This was flat compared to November 2023 but down compared to December 2022.

The lender reportedly said that consumer confidence ‘remains weak’, despite some mortgage rates falling in anticipation for Bank of England (BoE) to cut borrowing costs in the months ahead.

The number of housing transactions has been running at around 10% below pre-Covid levels, Nationwide reported. The fall was more pronounced for those buying a house using a mortgage – down 20% compared to before the pandemic.

However, the volume of cash deals continues to run above the levels recorded before Covid hit.

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UK house prices fall according to the Nationwide Building Society

UK House Price Drop

UK house prices dropped at their fastest annual pace for 14 years in July 2023, according to Nationwide.

The building society said house prices dropped by 3.8%, which is the biggest decline since July 2009. Nationwide said mortgage interest rates remain high, making affordability a difficult for house-buyers. Mortgage costs hit the highest level for 15 years in July 2023 as lenders grappled with inflation and uncertainty over rates set by the (BoE) Bank of England. The BoE recently raised interest rates by 0.5% to 5% in a belated efforet to curb rampant inflation which is currently well above the 2% target.

Average UK house £260,828

The average price of a home in the UK is £260,828 – 4.5% below the August 2022 peak. Many first-time buyers would welcome a drop in house prices, which have climbed in recent years, including during the pandemic.

But despite July’s fall, higher mortgage rates mean housing affordability ‘remains stretched‘, Nationwide said.

Real average house price data from 1975 – 2022*

*Indicative guide only (prices adjusted for inflation).