UK house prices saw their biggest monthly fall for more than two years in November as rising interest rates put off buyers, the Nationwide has said.
Prices fell 1.4% from October, which was the largest month-on-month fall since June 2020.
Annual house price growth saw a “sharp slowdown”, the building society said, falling to 4.4% from 7.2% in October.
Earlier this month, the government’s official forecaster predicted that house prices will fall by 9% over the next two years as affordability issues weigh on demand.
The average property price fell to £263,788 last month from £268,282 in October, the Nationwide said.
It said the housing sector was still being affected by the fallout from September’s mini-budget, which triggered a rise in mortgage rates and also led lenders to suspend hundreds of mortgage products amid turmoil on the financial markets.
Speaking to the BBC’s Today programme, Nationwide’s chief economist, Robert Gardner, said: “A lot of this reflects the fallout of the mini-budget and the big rise that we saw in mortgage rates, because that really did change the affordability calculations for prospective buyers and really made things a lot less affordable.”
He added: “If you look at the typical mortgage payment as a share of someone’s take-home pay, for the typical first-time buyer that was running at close to long-run averages of 30%. But as a result of the mini-budget it’s moved up to around 45% of take-home pay, which is clearly a massive difference.”
Mr Gardner said the market was likely to remain under pressure for some time, with inflation – the rate at which prices rise – set to remain high and the Bank of England likely to raise interest rates further.