House prices fell by 5.3 per cent in August compared to year prior, the largest annual decline since 2009, Nationwide’s House Price Index has revealed.
The index showed that the annual change in August 2023 was a fall of 5.3 per cent.
This is compared to the peak in August of last year and represents an annual fall of around £14,600 on the price of a typical home.
Additionally, this represents a change on the 3.8 per cent fall in annual change that was observed in June.
Nationwide chief economist, Robert Gardner, commented that this softening in the annual rate of house price growth is “not surprising” given the extent of the rise in borrowing costs in recent months.
Gardner suggested that this resulted in “activity in the housing market running well below pre-pandemic levels”.
He explained: “For example, mortgage approvals have been around 20 per cent below the 2019 average in recent months and mortgage application data suggests the weakness has been maintained more recently.”
However, Gardner stated that “a relatively soft landing is still achievable”, provided broader economic conditions “evolve in line with our expectations”.
The index additionally reported that house prices fell by 0.8 per cent over the month of August, reaching £259,153, down from £260,828 in June.
It was also revealed that home mover completions in the first half of 2023 were 33 per cent lower than 2019 levels, while first-time buyer numbers were around 25 per cent lower.
Buy-to-let purchases involving a mortgage were nearly 30 per cent below pre-pandemic levels.
However, cash purchases were found to have increased by 2 per cent.
Gardner explained: “The relative weakness of mortgage activity reflects mounting affordability pressures as a result of the sharp rise in mortgage rates since last autumn, which would not have affected cash buyers.”
tom.dunstan@ft.com
What's your view?
Have your say in the comments section below or email us: ftadviser.newsdesk@ft.com
