UK-based mortgage lender Nationwide announced that house prices in the country fell 5.3% in August compared to the previous year. This rate was recorded as the largest annual decline since the 2008-2012 global crisis.
According to Nationwide’s data, house prices fell 0.3% in July and 0.8% in August.
The organization’s chief economist, Robert Gardner, said the following about the decline in house prices:
“Activities in the housing market are well below the pre-pandemic level. “This is not surprising, considering the rise in interest rates in recent months.”
Gardner noted that mortgage loan approvals are about 20% lower than they were in 2019, and he expects that trend to continue. Nationwide does not expect a very sharp decline in the housing market due to the employment market remaining solid despite all this negative situation.
However, some experts think there will be a further decline in house prices. Andrew Wishart, senior property economist at Capital Economics, expects house prices to fall a further 5%. Housing prices in the country increased by approximately 25% during the pandemic period.
The BoE, the Bank of England, has been increasing interest rates since December 2021. The ECB, which implements a tight monetary policy to combat inflation, recently increased interest rates to 5.25%. Markets expect interest rates to continue rising at the next meeting.
