House prices in the UK are on track to fall 8 per cent this year after falling for four straight months, one of Britain’s largest mortgage lenders has said.
Plunging prices in Northern Ireland slowed to annual growth of 7.1% in December from 9.1% in November.
Halifax said its home price measure fell 1.5 percent last month after falling 2.4 percent in November. The numbers are similar to a reading by the Nationwide Building Society, which last week reported the longest price decline since 2008.
Rising interest rates and increasing pressure on the cost of living are weighing on the real estate market. The average cost of a home was £281,272 ($334,780), according to Halifax, down 4.3 per cent from a peak of £293,992 in August.
“The housing market continues to be impacted by the broader economic environment,” said Kim Kinnaird, director at Halifax Mortgages. “As buyers and sellers remain cautious, we expect both supply and demand to decline.”
Prices rose 2 percent throughout 2022, reflecting gains in the first half of the year as buyers bought properties outside of city centers with space to work from home.
Halifax said prices are now falling across all regions of the UK. The north-east of England saw the biggest slowdown in the annual pace of growth, falling 4 percentage points to 6.5 per cent annual growth in December.
In London, December prices rose 2.9 percent year-on-year, up from 5 percent.
“These trends need to be viewed in the context of historical prices,” Kinnaird said. “The cost of an average home remains high, higher than at the start of 2022 and over 11 percent higher than home prices at the start of 2021.”
The Bank of England has raised its benchmark interest rate nine times since December 2021, to 3.5 percent, the highest since 2008. Investors are expecting further increases of 1 percentage point this year.
That has pushed up mortgage rates, with the cost of an average two-year fixed-rate mortgage now standing at 5.79 percent and an average five-year at 5.63 percent, according to Moneyfacts.
The central bank says around 4 million UK households will see their own mortgage rates rise significantly over the next year.
Property portal Rightmove said activity in the housing market skyrocketed after Christmas, with a record number of new sellers listing homes for sale on December 26. The number of visitors to the website has also increased by leaps and bounds.
