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| UK house prices fall at sharpest rate for 14 years, says Nationwide | UK house prices fall at sharpest rate for 14 years, says Nationwide |
| (32 minutes later) | |
| UK house prices dropped at their fastest annual pace for 14 years in July, according to Nationwide. | UK house prices dropped at their fastest annual pace for 14 years in July, according to Nationwide. |
| The building society said prices dropped by 3.8%, which is the biggest decline since July 2009. | The building society said prices dropped by 3.8%, which is the biggest decline since July 2009. |
| Nationwide said mortgage interest rates remain high, making affordability a challenge for house-buyers. | Nationwide said mortgage interest rates remain high, making affordability a challenge for house-buyers. |
| Mortgage costs hit the highest level for 15 years in July as lenders grappled with inflation and uncertainty over rates set by the Bank of England. | Mortgage costs hit the highest level for 15 years in July as lenders grappled with inflation and uncertainty over rates set by the Bank of England. |
| The average price of a home in the UK is £260,828, which is 4.5% below a peak in August last year. | |
| Many first-time buyers would welcome a drop in house prices, which have climbed in recent years, including during the pandemic. | |
| But despite July's fall, higher mortgage rates mean housing affordability "remains stretched", Nationwide said. | |
| Robert Gardner, chief economist at Nationwide, said: "A prospective buyer, earning the average wage and looking to buy the typical first-time buyer property with a 20% deposit, would see monthly mortgage payments account for 43% of their take home pay - assuming a 6% mortgage rate. | |
| "This is up from 32% a year ago and well above the long-run average of 29%." | |
| Mortgage rates have been rising following a succession of interest rate rises by the Bank of England to tackle stubbornly high inflation. | |
| The Bank is expected to raise interest rates again on Thursday from 5% to at least 5.25%. It would be 14th rise in borrowing costs since December 2021. | |
| The UK inflation rate was 7.9% in the year to June, down from 8.7% in May - but food inflation remains high, at 17.3%. | |
| Soaring food and energy bills have helped drive inflation up. | |
| Mark Harris, chief executive of mortgage broker SPF Private Clients, said the expected interest rates rise means "we are not out of the woods just yet when it comes to rising mortgage costs". | |
| "However, a few lenders, including HSBC, Barclays and Nationwide, have reduced their fixed-rate mortgage pricing on the back of better-than-expected inflation news." | |
| Gabriella Dickens, senior UK economist at Pantheon Macroeconomics, said: "We think that house prices will have to fall by about 8% from their peak before demand and supply come back into balance." | |
| What happens if I miss a mortgage payment? | |
| If you miss two or more months' repayments you are officially in arrears | |
| Your lender must then treat you fairly by considering any requests about changing how you pay, such as lower repayments for a short time | |
| They might also allow you to extend the term of the mortgage or let you pay just the interest for a certain period | |
| However, any arrangement will be reflected on your credit file, which could affect your ability to borrow money in the future | |
| Read more here | |
| Related Topics | Related Topics |
| Nationwide Building Society | Nationwide Building Society |
| Personal finance | Personal finance |
| Housing market | Housing market |
| Inflation | Inflation |
| Cost of living | Cost of living |
| UK economy | UK economy |