Largest drop in house prices for 14 years in November

House prices in the UK experienced their biggest drop in 14 years in November, according to mortgage lender the Halifax.

Prices fell by  2.3% in November, reflecting the "volatility" in the market. It was the third month in a row in which house prices have fallen, which has led to potential buyers playing it safe and delaying purchases.

Higher mortgage rates, economic uncertainty, and the cost of living crisis are all having a negative affect on the housing market.

With the latest decrease, the annual rate of growth in property prices has dropped from 8.2% to 4.7%, taking the average UK house price to £263,788 – down from £268,282 in October.

Kim Kinnaird, director of Halifax Mortgages, said: "While a market slowdown was expected given the known economic headwinds - and following such extensive house price inflation over the last few years, this month's fall reflects the worst of the market volatility over recent months.

"Some potential home moves have been paused as homebuyers feel increased pressure on affordability and industry data continues to suggest that many buyers and sellers are taking stock while the market continues to stabilise."

Meanwhile rival lender, Nationwide’s Chief Economist Robert Gardner said that the price drop is due to continued fallout from the mini-Budget on 23 September.

“While financial market conditions have stabilised, interest rates for new mortgages remain elevated and the market has lost a significant degree of momentum,” he said.

“Housing affordability for potential buyers and home movers has become much more stretched at a time when household finances are already under pressure from high inflation.”

The Halifax said Wales and the South West of England had recorded particularly sharp slowdowns in annual house price growth.

Demand for rental accommodation remains high however, with rents at a record level, so rather than divest yourself of property, it's worthwhile sticking with renting your property or taking advantage of lower property prices to increase the size of your rental portfolio.

Contact us online or call 0161 511 5339 for a free consultation on how to begin your investment journey, or to arrange a complimentary Compliance and Performance Review of your current portfolio.