House prices have taken their biggest annual fall since 2009, plunging by 3.1% in March according to the latest report from Nationwide.
Every region of the UK experienced a slowdown of house price growth in the first three months of the year. Meanwhile, between February and March values fell by 0.8% – the seventh consecutive month prices have decreased.
It means the average UK house price is now £257,122.
Robert Gardner, Nationwide’s chief economist, said: “The housing market reached a turning point last year as a result of the financial market turbulence which followed the mini-Budget.
“Since then, activity has remained subdued – the number of mortgages approved for house purchase remained weak at 43,500 cases in February, almost 40% below the level prevailing a year ago.
“It will be hard for the market to regain much momentum in the near term since consumer confidence remains weak and household budgets remain under pressure from high inflation.
“Housing affordability also remains stretched, where mortgage rates remain well above the lows prevailing at this point last year.”
Whilst falling house prices are not good for sellers, estate agents believe it will help encourage more buyers to the market.
Nicky Stevenson, managing director at national estate agent group Fine & Country, said: “March’s fall in house prices is not unexpected, but all signs point to this motivating buyers as the housing market starts gearing up for the traditionally busy Easter period.”
She added: “There is no reason to think this is a blip either, as despite the latest base rate rise from the Bank of England, mortgage lenders are still cutting their rates — and this will only provide further encouragement that now is a good time to move home.
“Sellers are being realistic about the level they market their home at, and these lower prices are in turn incentivising buyers to start viewings.
“While one of the biggest drivers behind price growth in the last two years has been the limited supply of homes, stock levels are increasing, which is providing more space for price negotiations.”
