House prices in the UK fell at the fastest rate since the credit crunch of 2008, according to the Financial Times. The latest figures released by Halifax show that prices fell by 2.3% during November, the largest drop for 14 years. In October 2022, the average house price was £292,406, and in November this had fallen to £285,579.
The biggest falls were in Wales and south west England. However, these areas also experienced the greatest house price inflation during the pandemic, as people worked from home more often, and sought extra space. Some of the changes can be attributed to an expected recalibration of the market after a heated couple of years.
The economic downturn, the fastest rise in inflation for 40 years, and the ongoing cost of living crisis mean that a further fall in house prices over the coming months seems inevitable.
Kim Kinnaird, director at Halifax Mortgages, said: “While a market slowdown was expected given the known economic headwinds – and following such extensive house price inflation over the last few years (+19% since March 2020) – this month’s fall reflects the worst of the market volatility over recent months.”
She added: “Some potential home moves have been paused as homebuyers feel increased pressure on affordability and industry data continues to suggest that many buyers and sellers are taking stock while the market continues to stabilise.”
However, there is some good news, as mortgage rates continue to fall, after hitting peaks of well over 6% in October. For first time buyers, the coming months may be a good time to take advantage of lower house prices, and start shopping around for a mortgage deal.
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