UK house prices fall by most since 2012, mortgage approvals drop

British house prices last month dropped by the most in more than 10 years, mortgage lender Nationwide said on Wednesday, adding to signs of a slowdown in the housing market in the face of high inflation and rising borrowing costs.

The 1.1% fall was the biggest year-on-year drop since November 2012 and also the first annual decrease since June 2020, early in the coronavirus pandemic, when prices edged down by 0.1%, Nationwide said.

Separate Bank of England data showed British lenders approved the lowest number of mortgages in January since 2009, excluding a slump at the start of the COVID-19 pandemic.

Analysts in a Reuters poll published on Tuesday expect house prices to fall by 2.4% in 2023, less than previously as a resilient job market and easing recession fears soften the blow of higher borrowing costs.

Nationwide said that compared with January, prices were down by 0.5% for the sixth month-on-month fall in a row, the longest such run since one beginning in 2007 and ending in 2009, during the global financial crisis.