House prices fall at their fastest rate in 14 years

House prices in the UK have fallen at their fastest rate since July 2009, a major house price index reveals.

The data from Nationwide shows that prices are down 3.1% compared with March last year – the biggest fall in 14 years.

It is also the seventh consecutive month that prices have fallen.

Every region has seen a slowdown in price growth

The lender highlights that every region has seen a slowdown in price growth – and most have small year-on-year falls.

However, prices in the West Midlands offered the strongest performance with a 6.1% rise over the year and they are up 1.4% in the first quarter.

Scotland remains the weakest with a 3.3% drop since March 2022 and a 3.1% fall in the first three months of 2023.

‘Housing market reached a turning point last year’

Robert Gardner, Nationwide’s chief economist, said: “The housing market reached a turning point last year as a result of the financial market turbulence which followed the mini-Budget.

“Since then, activity has remained subdued – the number of mortgages approved for house purchase remained weak at 43,500 cases in February, almost 40% below the level prevailing a year ago.”

He added: “It will be hard for the market to regain much momentum in the near term since consumer confidence remains weak and household budgets remain under pressure from high inflation.

“Housing affordability also remains stretched, where mortgage rates remain well above the lows prevailing at this point last year.”

‘House price slip has become a slump’

Sarah Coles, the head of personal finance at Hargreaves Lansdown, said: “The house price slip has become a slump, with the biggest annual price drop in 14 years.

“The pace of descent accelerated, and we’re already almost 5% below the peak in August.

“Unfortunately, the indications for the future aren’t looking terribly promising either.”

She added: “Buyers have been broken by rampant inflation, jacked-up mortgage rates, a stagnating economy, and the threat that there could be worse to come.”

‘Agents are reporting transaction levels year on year to be stable’

Nathan Emerson, Propertymark’s chief executive, said: “Our member agents are reporting transaction levels year on year to be stable and listings of new properties coming to the market also being steady.

“With a stream of serious buyers still keen to move, and prices still higher compared to this time last year, sellers are still in a strong position to sell, however they can no longer test the market at higher prices and align with those achieved last year.

“Instead, they will need to reduce or be open to offers in order to get a more realistic and efficient sale.”

‘Largest annual decline in house prices since the depths of the financial crisis’

Iain McKenzie, the chief executive of The Guild of Property Professionals, said: “With the largest annual decline in house prices since the depths of the financial crisis, homeowners may be worried about what this means for them.

“Unlike the financial crisis, we haven’t seen an aggressive drop-off in transactions, so the slowdown in prices has hardly been the crash that was expected.”

He added: “Sellers are becoming more open to negotiating with buyers on the asking price and that has the potential to skew the data.

“While we are forecasting an overall decrease of around 8% this year, this would only bring house prices in line with levels back in 2021.”

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