UK house prices fell for the first time in three months by 0.2 percent in March, suggesting the market may be stagnating due to high mortgage rates and strained affordability.
Robert Gardner, Nationwide’s chief economist, said: “Activity has picked up from the weak levels prevailing towards the end of 2023 but remains relatively subdued by historic standards. For example, the number of mortgages approved for house purchases in January was about 15 percent below pre-pandemic levels. This largely reflects the impact of higher interest rates on affordability.”
Mortgage rates have dropped significantly from the middle of last year, when a typical five-year deal had risen above 5.5 percent. Figures from Nationwide indicated that the average was down below 4.5 percent.
The building society, which is the country’s third biggest mortgage provider and is in the process of buying Virgin Money for 2.9 billion (HK$28.51 billion), said that with the cost of living pressure easing and inflation rates reducing, consumer sentiment was improving, with surveyors reporting a pickup in new buyer inquiries.
It also indicated that wage growth was outpacing house price growth, which would make buying a home more affordable.
Staff reporter
