02.10.202309:23:00UTC+00UK House Prices Continue To Log Sharp Decline: Nationwide

UK house prices fell sharply again in September as stretched affordability damps housing market activity, data from the mortgage lender Nationwide Building Society revealed Monday. The Nationwide house price index posted an annual decline of 5.3 percent, the same pace of decrease as seen in August. The decrease was the biggest since July 2009. Nonetheless, prices were forecast to fall more markedly by 5.7 percent.

House prices remained flat on the month in September following the previous month's 0.8 percent decrease. The nil growth was in contrast to the expected fall of 0.4 percent.

Nationwide Chief Economist Robert Gardner said housing market activity remained weak with mortgage approvals in August about 30 percent below the monthly average prevailing in 2019 before the pandemic struck.

This relatively subdued situation is not surprising given the more challenging picture for housing affordability, said Gardner.

Although investors downgraded their expectations for the future interest rate, borrowing costs are unlikely to return to the historic lows seen in the aftermath of the pandemic, Gardner added.

Solid income growth coupled with moderately lower house prices and mortgage rates are more likely to gradually improve affordability over time amid the fairly subdued housing market activity, Nationwide said.

In September, the Bank of England kept its interest rate unchanged after 14 back-to-back rate hikes.

In the third quarter, all regions showed annual price declines.

London posted a decrease of 3.8 percent annually. South West was the weakest performing region, with prices falling 6.3 percent.

Overall house prices in the UK were down 4.7 percent in the third quarter.