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House prices in the UK fell for the seventh month in a row.

 

Houses
House prices in the UK fell for the seventh month in a row in March and by more than economists had expected.

According to Nationwide, prices retreated another 0.8 per cent over the past month, taking the average value of a home in the UK down to £257,122. That is 3.1 per cent lower than a year ago, taking prices back to roughly where they were in January 2022.

Economists had been predicting prices to fall by 0.3 per cent month-on-month and by 2.2 per cent compared to last year. The year-on-year decline is the most prominent Nationwide had reported since July 2009, when the financial crisis was nearing its end.

House prices in the UK are now 4.6 per cent below their peak last August. Pantheon expects prices will not stabilise until they fall 8 per cent below last year’s high.

Despite the slowdown in the market, it still pales compared to what happened during the financial crisis. House prices fell for 16 consecutive months between November 2007 and February 2009, when the annual rate of decline peaked at 17.6 per cent.

After a lockdown-induced boom that pushed prices to record highs seemingly every month, the market has reversed in recent months. The cost of living crunch and a lingering prospect of recession have battered consumer confidence, as did the political instability caused by the mini-budget in September, which also prompted a rapid jump in mortgage rates.

During the pandemic, monthly approvals peaked at more than 100,000. In February, the latest month for which the Bank of England has published data, the number of mortgages approved for house purchase totalled 43,500.

In the years leading up to the first lockdown, typically, about 66,000 mortgages would have been approved in any given month.

«It will be hard for the market to regain momentum in the near term since consumer confidence remains weak and household budgets remain under pressure from high inflation,» Robert Gardner, Nationwide’s chief economist, said. «Housing affordability also remains stretched».

Nationwide splits the UK into 13 regions, nine of which recorded year-on-year house price falls in the first quarter of this year.

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