In November, house prices in Britain fell at the sharpest pace in 14 years after interest rates surged, reducing the affordability of properties, Halifax said.
The mortgage lender said prices fell 2.3%, the third consecutive decline. A typical property in the UK costs 285,579 $346,280, down from 292,406 in October.
The findings add to the evidence that the housing market may be headed for a more protracted downturn. Mortgage lender Nationwide Building Society said in November that home prices fell 1.4%, which is the fastest drop since the global financial crisis.
Kim Kinnaird, director at Halifax Mortgages said that some potential home moves have been paused due to increased pressure on affordability. Industry data shows that many buyers and sellers are taking stock while the market continues to stabilize. When the Bank of England started raising interest rates to choke off a jump in inflation, house prices are now 4.7% higher than a year ago. The central bank has signaled that it is likely to keep boosting rates, prompting investors to anticipate a half-point increase in the key rate to 3.5% next week.
In the past few weeks, mortgage rates have soared above 6%, the highest level since the financial crisis. They are significantly higher than the near 1% deals that were available in 2021 despite the fact that they were just below that level in the past few days.
With 85% of mortgage holders on fixed rates, households are protected from high borrowing costs, but monthly payments for those who refinance in 2023 are set to double.
Halifax said that the only exception to slowing price growth continued to be the north east of England, where annual growth was up a bit in November to 10.5%, up from 10.4% the previous month.
London was the biggest laggard. In November, the annual prices of homes in the capital rose 5.2%, down from 6.6% in October.
In the past few weeks, Zoopla and Rightmove reported that sellers are cutting asking prices to attract buyers across the country. The Office for Budget Responsibility expects to see a 9% decline in house prices over the next two years.
The UK construction activity hit a hard time in November because of the weakening demand in other parts of the property sector. S&P Global's index tracking output fell to its lowest point in three months, and growth in construction activity was confined largely to the commercial segment.
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