British house prices tumbled 1.4 per cent in November compared with October, the biggest monthly drop since June 2020 and the clearest sign yet that the housing market is cooling rapidly, data from mortgage lender Nationwide showed on Thursday.
A Reuters poll of economists had pointed to a fall of 0.3 per cent, following a 0.9 per cent drop in October.
In annual terms, house price growth slowed to 4.4 per cent in November from 7.2 per cent in October, Nationwide said.
Other gauges of house prices have also pointed to a slowdown underway.
Nationwide said the fallout from the September economic agenda of former prime minister Liz Truss – which triggered a collapse in British financial assets, amplified by the structure of the pension industry – continued to reverberate through the housing market.
“While financial market conditions have stabilised, interest rates for new mortgages remain elevated and the market has lost a significant degree of momentum,” Nationwide chief economist Robert Gardner said.
He said the market was likely to remain subdued in the coming quarters, although a “relatively soft landing” was possible, thanks to the strength of the labour market and weak supply of homes coming to the market.
A Reuters poll of economists and property market analysts last week forecast house prices would drop around 5 per cent next year, having risen about 24 per cent since early 2020, according to official data.