UK house prices fall at fastest annual rate since 2009

theguardian.com:

UK house prices have fallen at their fastest annual rate since the aftermath of the financial crisis in 2009, with experts at Nationwide warning that the squeeze on household budgets will make it hard to regain momentum any time soon.

The price of an average property dropped 3.1% to £257,122 over the year to March, according to Nationwide Building Society’s house price index. That is compared with a 1.1% annual decline in February.

Prices also fell on a month-on-month basis, dropping 0.8% since February. It marked the seventh monthly decline in a row and leaves prices 4.6% below their most recent peak in August, beforethe housing market was rocked by Liz Truss’s disastrous mini-budget.

“Since then, activity has remained subdued – the number of mortgages approved for house purchase remained weak at 43,500 cases in February, almost 40% below the level prevailing a year ago,” Robert Gardner, Nationwide’s chief economist, said.

He said it could take some time before prices rebound, as household finances come under pressure from rising bills and higher mortgage rates.

“It will be hard for the market to regain much momentum in the near term since consumer confidence remains weak and household budgets remain under pressure from high inflation,” Gardner said. “Housing affordability also remains stretched, where mortgage rates remain well above the lows prevailing at this point last year.”

However, there could be some hope on the horizon, as fresh data released on Friday morning showed the UK avoided a recession at the end of last year, with national output rising 0.1% in the final three months of 2022. That is compared with initial estimates of no growth in GDP over the period, according to the Office for National Statistics data.

Nati