The housing market was hit by turmoil following the mini-budget, Nationwide said.
Image source, Getty ImagesUK house prices fell for the first time in over a year last month, according to Nationwide, which said the turmoil sparked by Truss’ government’s mini-budget had hit housing sales.
Prices fell by 0.9% month-on-month in October, the first monthly decline in 15 months, the mortgage lender said.
The monthly fall was the largest since June 2020, at the height of the Covid pandemic.
Annual UK house price growth also slowed sharply last month.
“The market has undoubtedly been impacted by the turmoil following the mini-budget, which led to a sharp rise in market interest rates,” said Robert Gardner, Nationwide’s chief economist.
“Higher borrowing costs have added to stretched housing affordability at a time when household finances are already under pressure from high inflation,” he added.
Investors reacted badly to the plan unveiled by the previous prime minister Liz Truss and her chancellor Kwasi Kwarteng in September, which promised billions of pounds of tax cuts without explaining how they would be paid for.
Mortgage rates rose and lenders also suspended hundreds of mortgage products, amid uncertainty over how to price these long term loans.
Across the UK, the average house price in October was £268,282.
Meanwhile, there was a sharp slowdown in annual house price growth last month, to 7.2% from 9.5% in September, and the housing market looks set to slow in the coming months, Nationwide said.