Monday, October 2, 2023

House prices in the UK have fallen the most since 2009 as interest rates have risen

LONDON, September 7 (Reuters) – UK house prices fell last year at the fastest pace since 2009, reflecting the increasing impact of rising interest rates, the Halifax Mortgage Bank said on Thursday.

Home prices last month were 4.6% lower than in August 2022, when they were near their peak, according to Halifax. This compares to a 2.5% annual decline in July and a 3.45% average decline expected in a Reuters poll.

In August alone, prices fell 1.9%, the sharpest monthly decline since November 2022 and also more than the 0.3% survey forecast.

“Real estate prices have proved more resilient than expected so far this year (…). However, there is always a delayed effect with rate hikes and now we could see a larger impact from higher mortgage costs,” said Kim Kinnaird, director of Halifax Mortgages, part of Lloyds Banking Group.

The Bank of England has hiked interest rates 14 times since December 2021, raising interest rates to 5.25% in August. Governor Andrew Bailey said on Wednesday that interest rates are now “much closer” to their peak than before, although financial markets still expect another hike to 5.5% this month and another hike thereafter.

Rival mortgage lender Nationwide reported last week that house prices in August were down 5.3% from a year earlier.

Official data showed that house prices rose 27% between February 2020 and their peak in September 2022, driven by increased demand for housing during the COVID-19 pandemic, temporary tax breaks and low interest rates. interest for much of this period.

According to Halifax, average house prices have fallen to levels similar to those seen in early 2022: £279,569 ($349,601), £14,000 down from last year’s peak but still around £40,000. pounds more than before the pandemic.

A Reuters poll of property market analysts last week said they expect prices to fall 4% this year and remain flat in 2024, before rising 3.3% in 2025.

Nation World News Desk
Nation World News Desk
Nation World News is the fastest emerging news website covering all the latest news, world’s top stories, science news entertainment sports cricket’s latest discoveries, new technology gadgets, politics news, and more.
Latest news
Related news