UK house prices have fallen further as rising mortgage rates deterred home buyers and prompted owners to repay property loans at a near record rate. Figures from the Nationwide Building Society released on Thursday showed prices of the average property in May were 3.4 per cent lower than a year earlier, with the annual fall accelerating from 2.7 per cent in April.
The dip came as separate data from the Bank of England showed households reduced overall mortgage debt by £1.4bn in April, the highest net repayment since records began in 1993 apart from one month during the Covid pandemic.
The Nationwide said that prices fell 0.1 per cent in May, reversing an unexpected rise in April in its data, which was not replicated in other house price measures. With the exception of the April blip, the Nationwide figures showed that house prices have fallen for the past nine months in response to the Bank of England’s aggressive increases in interest rates.
Robert Gardner, Nationwide’s chief economist, said the signs were not looking positive for the housing market in the months ahead, even though the level of mortgage approvals and housing transactions had recovered from a trough after Liz Truss’s “mini” Budget.