House prices in the UK plummeted by 2.3 per cent in November – the biggest monthly fall since 2008, according to Halifax.
The bank also said he annual rate of house price growth slowed to 4.7 per cent, from 8.2 per cent in October. Meanwhile, the average UK house price in November was £285,579.
Kim Kinnaird, director, Halifax Mortgages, said: “The monthly drop of 2.3 per cent is the largest seen since October 2008 and the third consecutive fall.”
Mortgage rates jumped following the mini-Budget by Liz Truss and Kwasi Kwarteng in September, with the Bank of England’s base rate rises also pushing up borrowing costs, against a backdrop of households being squeezed by rising bills generally.
Ms Kinnarid continued: “While a market slowdown was expected given the known economic headwinds – and following such extensive house price inflation over the last few years (19 per cent growth since March 2020) – this 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.
Property prices are now up by more than £12,000 comapared with last year, she explained. Prices are also sitting well above pre-pandemic levels, having gone up by £46,403 compared with March 2020.
“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.”
Halifax said Wales and the south west of England have recorded particularly sharp slowdowns in annual house price growth.
Both have been key hotspots of house price inflation during the coronavirus pandemic, suggesting that previous drivers of the market such as the “race for space” and heightened demand for rural living are now receding, Halifax said.
The pace of annual property price inflation also slowed in London, which continues to lag the other UK regions and nations.
The average property price in London remains well above the UK average.
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