British house prices fell 1.8 per cent over 12 months to December, mortgage lender Nationwide reported on Friday.
The UK housing market, which boomed during the COVID-19 pandemic, suffered from rising borrowing costs after the Bank of England raised interest rates in an attempt to curb inflation. However, the fall in mortgage rates in recent weeks has shown that the market may have bottomed out.
Robert Gardner, chief economist at Nationwide, pointed out that house prices had fallen by almost 4.5 per cent from their all-time high of 2022.
Housing market activity was weak throughout 2023.
The 1.8 per cent year-on-year fall in house prices in December marked the sharpest since a 15.9 per cent decline in December 2008, according to Nationwide.
“If the economy remains sluggish and mortgage rates moderate only gradually, as we expect, house prices are likely to record another small decline or remain broadly flat (perhaps flat to down 2%) over the course of 2024.”
Gardner also highlighted low consumer confidence, low levels of buyer enquiry amongst house valuers and the risk that interest rates would remain high due to ongoing inflationary pressures.
According to Nationwide, despite house prices falling in most parts of the UK this year, Northern Ireland and Scotland were the only regions to record growth.
