According to data from Nationwide Building Society, the UK property market has experienced its first annual decline since 2012.
In the year leading up to February 2021, house prices decreased by 1.1%, according to data released today. This follows a monthly decline of 0.5% in January.
Robert Gardner, chief economist at Nationwide Building Society, predicted that economic headwinds would make it difficult for the market to regain momentum in the near future. He observed that mortgage rates remain “significantly higher” than they were at the beginning of 2021.
Regarding the data, Mr. Gardner stated, “We anticipate the labour market to weaken as the economy contracts in the coming quarters and as living expenses remain elevated, while wage growth is likely to be moderate. This will continue to make housing less affordable, which may reduce demand.
After over a decade of growth in the UK housing market, the news of a decline in home prices comes as a surprise to many. Several factors, including record-low interest rates, a stamp duty holiday, and the government’s Help-to-Buy programme, had previously contributed to price increases.
However, rising living expenses and mortgage rates have made it difficult for many prospective buyers to afford a home. This has resulted in a decline in house prices, which may have repercussions for the housing market and the UK economy as a whole.
According to data released by Nationwide Building Society today, house prices in the United Kingdom have fallen annually for the first time since November 2012. The data revealed that house prices fell 1.1% annually through February 2021, with a 0.5% monthly decline from January.
Robert Gardner, chief economist at Nationwide Building Society, said in response to the data, “Economic headwinds appear likely to remain relatively strong, with the labour market widely anticipated to weaken as the economy contracts in the coming quarters, and wage growth likely to be subdued.”
The news is unexpected after more than a decade of steady growth in UK house prices, which had been supported by record-low interest rates and government initiatives such as Help to Buy. However, rising living expenses and mortgage rates have made it increasingly difficult for many prospective buyers to afford a home. This has exerted pressure on home prices and may have repercussions for the housing market and the economy as a whole in the United Kingdom.
For those seeking to buy or sell real estate, it is evident that affordability will continue to play a significant role in the coming months and years. It is also important to remember that despite the fact that house prices have decreased year-over-year, they are still significantly higher than they were prior to the pandemic.
