UK realty prices end 2022 on a weak note after pandemic-led boom

London: The United Kingdom’s annual house price growth marked a further “sharp” dip in December, mortgage lender Nationwide said, ending 2022 on a sluggish note as the impact of surging mortgage costs reversed some of the pandemic-led boom in the realty market.

The lender also said that the final month of 2022 saw prices record their worst run since 2008 on a monthly basis, falling 0.1% compared with November in their fourth consecutive monthly price fall.

In annual terms, the growth in Britain’s real estate sector slowed to 2.8% in December from 4.4% in November, the mortgage lender said, compared with the 2.3% growth forecast done earlier.

House prices have weakened in recent months as former Prime Minister Liz Truss’s plans for unfunded tax cuts spooked markets and hiked borrowing costs, making home loans less affordable and causing lenders to suspend mortgage products at one point.

That has marked a slowdown from last year when price growth reached multi-year highs due to strong demand as people desired bigger homes more suited for remote working during the health crisis.

“While financial market conditions have settled, mortgage rates are taking longer to normalise and activity in the real estate sector has shown little signs of recovery,” Nationwide chief economist Robert Gardner said in a statement.

“It will be hard for the market to regain much momentum in the near term as economic headwinds strengthen, with real earnings set to fall further and the labour market widely projected to weaken as the economy shrinks.”

New Year activity in realty

Earlier in December, a survey by the Royal Institution of Chartered Surveyors (RICS) showed the most widespread house price falls in Britain since early in the pandemic last month.

RICS’ chief economist Simon Rubinsohn had said the downbeat tone reflected “the uncertain macro environment and the higher cost of mortgage finance”.

Nationwide’s Gardner, who reiterated on Friday a previous prediction that house prices were on track to drop by about 5% next year, also said the recent weakness in mortgage applications may partly reflect an early seasonal slowdown.

He said that the housing market remaining buoyant in the first three quarters of 2022 despite weak consumer confidence gave some reassurance that there would be a pick-up in activity in the New Year.

Read all the Latest News, Trending News, Cricket News, Bollywood News,
India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.