UK house prices are falling at their fastest rate in 14 years, Halifax says

House prices in the UK fell the most in 14 years in November after interest rates soared and house affordability fell, Halifax said.

The mortgage lender said prices fell 2.3 percent, the third straight decline. A typical property in the UK is now £285,579 ($346,280) compared to £292,406 in October.

The results show that the housing market may be headed for a prolonged downturn. Mortgage lender Nationwide Building Society said last week house prices fell 1.4 percent in November, the fastest fall since the global financial crisis, barring the pandemic.

“Some potential moves have been put on hold as homebuyers feel increased affordability pressures,” said Kim Kinnaird, a director at Halifax Mortgages. “Industry data continues to suggest many buyers and sellers are taking stock as the market continues to stabilize.”

House prices are now 4.7 percent higher than a year ago, when the Bank of England began raising interest rates to dampen a surge in inflation. The central bank has signaled it is likely to hike rates further, prompting investors to expect a half-point hike in the benchmark interest rate to 3.5 percent next week.

Mortgage rates have risen to over 6 percent in recent weeks, also the highest level since the global financial crisis. While they’ve ticked just below that level for the past few days, they remain significantly higher than the nearly 1 piece deals available in 2021.

With 85 percent fixed-rate mortgage holders, households are largely protected from high borrowing costs for now, but monthly payments will double for those who need to refinance in 2023.

Halifax said the only exception to the slowdown in price growth remains the north-east of England, where annual growth edged up to 10.5 percent in November from 10.4 percent in the previous month.

London was the biggest laggard. Annual house prices in the capital rose just 5.2 percent in November, compared to 6.6 percent in October.

In recent weeks, property search sites Zoopla and Rightmove have reported that sellers are lowering their asking prices to lure buyers across the country. The Office for Budget Responsibility expects house prices to fall by 9% over the next two years.

Softer demand has also impacted other parts of the property sector and UK construction activity was hit hard in November. Index-tracking output from S&P Global fell to its weakest level in three months and construction activity growth was largely confined to the commercial segment.

https://www.independent.ie/business/world/uk-house-prices-fall-fastest-in-14-years-halifax-says-42201527.html UK house prices are falling at their fastest rate in 14 years, Halifax says

Fry Electronics Team

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