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UK house prices fall for fourth month, longest run since 2008

According to Nationwide, property prices in the UK fell for the fourth month in a row in December, the longest run of declines since 2008.

Annual house price growth also slowed sharply as the year drew to a close, to the lowest rate since mid-2020, with all regions of the country affected, according to the building society’s monthly survey.

The average property price fell by 0.1% month on month to £262,068 – a much smaller drop than in the previous two months – which left prices 2.5% lower than their August peak after considering seasonal effects.

The annual growth rate cooled to 2.8% in December from 4.4% in November, Nationwide said. This is the lowest since July 2020, when it was 1.5%.

House price growth slowed in all UK regions, particularly in south-west England, where the annual rate fell from 12.5% to 4.3% in the last quarter, while in Wales, annual growth slowed from 12.1% to 4.5%. England overall recorded a rate of 4.8%, down from 9.9%, with London the weakest performing English region, as annual growth eased to 4.1% from 6.7% in the third quarter.

Jeremy Leaf, a north London estate agent and a former residential chair of the Royal Institution of Chartered Surveyors, said: “The drop in house prices is not surprising considering the sharp rise in the cost of living and especially interest rates. Prices may soften further as concerns about job security increase, and uncertainty will remain until mortgage payments are seen to stabilise.

“However, the housing market continues to be supported by strong employment, lack of stock and lender forbearance, which reduce the risk of mortgage defaults and prevent a larger fall in house prices.”

While the housing market is expected to cool further next year, and some experts are forecasting sharp declines in house prices of up to 12%, Robert Gardner, Nationwide’s chief economist, predicts a more modest drop in values of about 5%.

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