House prices drop by largest amount in over a decade

June 10, 2023 by Brendan O'Neill

House Prices

The latest UK property market figures show that the average price of a home has fallen by the largest amount annually since 2009, which was in the immediate wake of the 2008 financial crisis.

These figures have been released by Nationwide, and they show that there was a 3.4% fall in the average price of homes that were sold last month, in comparison to May of 2022. That is the biggest annual fall in prices that the market has witnessed since the summer of 2009, which brought a 6.2% fall following the crisis that hit during the previous year.

When looked at with the benefit of seasonal adjustment, May brought a 0.1% drop in the price of properties that were sold, whereas the month before had seen an increase of 0.4%. Overall, the average price of a home across the UK during May was £260,736.

Robert Gardner, the Chief Economist for Nationwide, told Mortgage Strategy that there was a tapering off of growth last month after some small signs of improvement the month before. He then went on to say:

“However, this largely reflects base effects with prices broadly flat over the month after taking account of seasonal effects. Average prices remain 4% below their August 2022 peak.”

Gardner concluded by pointing out that mortgage approval levels have stayed below pre-Covid-19 levels despite other indications of recovery.

Advisors should use their CeMAP training to focus on areas of the market other than purchase clients until inflation and living costs come down.