Mortgage lenders Nationwide and Halifax both had house prices falling last month.
The Nationwide monthly house price index showed prices dipping by 1.4 per cent, the Halifax equivalent, by 2.3 per cent. Both showed the annual rate or house price growth falling to below 5 per cent – Nationwide to 4.4 per cent, Halifax to 4.7 per cent.
‘The fallout from the mini-Budget continued to impact the market, with November seeing a sharp slowdown in annual house price growth’, said Nationwide chief economist Robert Gardner.
‘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’.
The outlook is uncertain, said Gardner, ‘and much will depend on how the broader economy performs, but a relatively soft landing is still possible’.
Halifax Mortgages director Kim Kinnaird said the November drop in prices had been the largest since October 2008 and was the third consecutive monthly fall.
While a market slowdown was expected, last month’s fall reflects the worst of the market volatility over recent months.
‘Some potential home moves have been paused as homebuyers feel increased pressure on affordability and industry data continues to suggest that many buyers and sellers are taking stock while the market continues to stabilise.
‘When thinking about the future for house prices, it is important to remember the context of the last few years, when we witnessed some of the biggest house price increases the market has ever seen. The market may now be going through a process of normalisation. While some important factors like the limited supply of properties for sale will remain, the trajectory of mortgage rates, the robustness of household finances in the face of the rising cost of living, and how the economy – and more specifically the labour market – performs will be key in determining house prices changes in 2023’.
