London, June 30 (BNA): British house prices fell by the most since 2009 in the 12 months to June, the Nationwide mortgage lender said on Friday, although monthly data showed an unexpected slight rise.
Compared to June last year, the median home price fell 3.5%, Nationwide said, after an annual decline of 3.4% in May. Reuters reported that prices rose 0.1% in June from May.
Analysts polled by Reuters had expected prices to drop 0.3 percent month-on-month and 4.0 percent year-on-year.
Britain’s housing market is slowing as the Bank of England sharply raises interest rates in a bid to curb the highest inflation rate among the world’s major affluent economies.
Earlier this year, the market showed signs of stabilizing after the turbulence of late 2022 when former Prime Minister Liz Truss’ “mini budget” plans for tax cuts rattled financial markets.
But a series of stronger-than-expected inflation numbers has sent bond yields and mortgage interest rates higher, most recently after the Bank of England raised its base rate by half a percentage point last week.
Much of the impact of higher borrowing costs on mortgage holders has yet to hit the housing market.
UK Finance estimates that 800,000 fixed-interest mortgages need to be refinanced in the second half of this year, and a further 1.6m in 2024, out of a total of around 9m residential mortgages.
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