HOUSE prices in the UK fell for the fifth month in a row in January, according to Nationwide Building Society.
The price of the average property last month was £258,297, down by 0.6% on December.
Annual house price growth slowed to 1.1%, down from 2.8% in December.
The country’s biggest building society said it would be “hard for the market to regain much momentum in the near term.”
Robert Gardner, chief economist at Nationwide, said “economic headwinds are set to remain strong”, as rising prices continue eating into household budgets.
He added that the affordability of mortgages would “remain challenging” in the short term due to higher interest rates, while saving for a deposit was “proving a struggle for many given the rising cost of living”.
On Tuesday, the Bank of England reported lenders had approved fewer mortgages than expected in December, about 35,000 compared with more than 46,000 in November.
That is the lowest number since January 2009, excluding the pandemic lockdowns.
Nationwide said the decline in approvals followed a big slowdown in mortgage applications following the government’s mini-budget in September.
However, it said there were signs mortgage rates were slowly starting to improve.
Nationwide’s latest figures suggest mortgages are less affordable in all regions compared with 2021, with the cost of servicing the typical mortgage as a share of take-home pay at or above the long-run average.
London and the south of England face the biggest “affordability pressures”, with Scotland and the North remaining the most affordable regions, but mortgage payments there as a share of take-home pay are still at their highest level for more than a decade.