Residence costs fell 3.1 p.c final month, the most important annual decline since July 2009, in keeping with Nationwide Constructing Society.
Property values fell 0.8 per cent – the seventh straight month-to-month drop – bringing the typical home value to £257,122, it stated on Friday.
It stated the housing market has reached a “turning level” after final 12 months’s disastrous mini finances and that purchases have been “subdued” since then.
Robert Gardner, Nationwide’s chief economist, stated this development is prone to proceed.
“It will likely be tough for the market to regain a lot momentum within the close to time period as client confidence stays weak and family budgets proceed to be squeezed by excessive inflation,” he stated.
“Housing affordability additionally stays underneath stress, whereas mortgage charges stay effectively above final 12 months’s lows at this level.”
All areas of the UK skilled a slowdown in home costs within the first three months of the 12 months, with most registering small annual declines.
Scotland was hardest hit by value weak point, with costs falling 3.1 p.c within the first quarter in comparison with a 12 months earlier. The West Midlands carried out the strongest, with a rise of 1.4 p.c.
Victoria Scholar, head of funding at Interactive Investor, stated: “The UK housing market has been in disarray for the reason that mini-Funds fiscal fiasco final September, which despatched mortgage charges up. [rising sharply] whereas many mortgage offers had been taken off the market.
Since then, whereas mortgage charges have normalised, home costs have suffered from rising Financial institution of England rates of interest, sluggish financial development, falling actual wages and weak client confidence.
“Many would-be patrons are holding off anticipating inflation, dwelling costs and mortgage charges to chill additional this 12 months, making the market extra reasonably priced, which ought to lure patrons again.”
Iain McKenzie, chief government of the Guild of Property Professionals, stated: “Whereas we forecast an general decline of round 8 per cent this 12 months, this could solely carry home costs consistent with ranges [recorded] again in 2021.”
