UK house prices fall at their fastest pace in two years
Nationwide’s house price index shows UK house prices fall 1.4% month-on-month decrease in prices, their biggest fall since June 2020 as rising mortgage costs weigh on the market
- (opens in new tab)
- (opens in new tab)
- (opens in new tab)
- Sign up to our newsletter Newsletter

The lasting effects of September’s disastrous mini-budget were felt in November as UK house prices fall at their fastest pace in two years.
Nationwide’s latest house price index shows UK house prices fell 1.4% month-on-month in November, following a 0.9% drop in October. This is their biggest fall since June 2020.
Annual UK house price growth also slowed, down from 7.2% in October to 4.4% in November.
The slowdown follows steep increases in mortgage rates, which shot to over 6% after Liz Truss’s mini-budget spooked markets and increased borrowing costs.
Affordability “was becoming more stretched across the UK” even before the recent increases in mortgage rates, says Robert Gardner, Nationwide’s chief economist. Not only are buyers facing higher repayments, but also the rising cost of living – inflation hit a record high of 11.1% last month as food and energy prices pushed costs up.
What next after UK house prices fall?
It looks as though the house price boom is coming to an end, or at least a severe slowdown, following the two years of rapid growth seen throughout the pandemic.
The Office for Budget Responsibility has already predicted property prices will fall by 9% over the next two years.
“The market looks set to remain subdued in the coming quarters,” said Gardner. “Inflation is set to remain high for some time and Bank Rate is likely to rise further as the Bank of England seeks to ensure demand in the economy slows to relieve domestic price pressures.”
Interest rates are currently at their highest level since 2008. The Bank of England raised interest rates to 3% in November, and the Bank’s chief economist has warned further increases are likely when the Bank meets on 15 December.
This means borrowing costs are likely to remain high for some time; interest rates are forecast to hit 4.5% to 5% by next year.
"It might make sense for first-time buyers to sit on their hands for the time being and wait for prices to bottom out". says Karen Noye, mortgage expert at Quilter
Elevated interest rates have cost the market “a significant degree of momentum”, says Gardner. “Housing affordability for potential buyers and home movers has become much more stretched at a time when household finances are already under pressure from high inflation.”
Long-term borrowing rates have fallen back to around 5% from their 6% highs, but households are also under pressure from higher food and energy prices.
Demand is likely to decrease as the cost of living remains high and people opt to “batten down the hatches and ride out the cost-of-living storm”, says Karen Noye, mortgage expert at Quilter.
But, says Noye, the dip might not last long. “With the stamp duty cut still in play and a serious lack of stock in the market, we should experience just a dip in the housing market as we adjust to a new cost environment which should eventually ease,” she says. “When it does, property prices are likely to rebound.
“It may therefore make sense for first-time buyers to sit on their hands for the time being and wait for prices to bottom out. However, timing the market is no easy feat and it's unwise to put life on hold if you need to move or buy.”
Related articles
Nicole graduated with a BA in Journalism & Communications from Cardiff University and then went on to do a Masters in Magazine Journalism at City, University of London. She started off as an editorial assistant at MoneyWeek in 2019, and now as well as contributing to the website she’s a writer and section editor for the magazine. Outside of work she loves cooking and eating, her dog Moose and her cat Fish, and buying more plants than she can fit in her house.
-
-
Water bills up in April: how much more will you pay?
Water bills are set to go up in April – what does this mean for you and how to get help with bills
By Sue Hayward • Published
-
Base rate rises to 4% - what it means for your money
The Bank of England has increased the base rate from 3.5% to 4%, marking the 10th rise in a row. We explain what this means for your mortgage, savings and loans
By Ruth Emery • Published
-
Base rate rises to 4% - what it means for your money
The Bank of England has increased the base rate from 3.5% to 4%, marking the 10th rise in a row. We explain what this means for your mortgage, savings and loans
By Ruth Emery • Published
-
House prices drop for fifth straight month: 10 places least and most vulnerable to house price crash
As house prices drop for the fifth month in a row, we reveal the 10 areas of the UK most immune to falling property prices
By John Fitzsimons • Published
-
Buying a house: the UK’s most expensive postcodes
Data from GetAgent has broken down the most expensive and cheapest postcodes in which to buy a property
By Nicole García Mérida • Published
-
Where you can find the happiest homes for less-than-average house prices - do you live in one of these happiness hotspots?
Could you live in an area with above-average happiness and below-average house prices?
By Katie Binns • Published
-
House prices rose 10.3% in November - yet first monthly fall since October 2021
Average house price increased 10.3% year-on-year to November
By Katie Binns • Published
-
Biggest January rise for house prices since pandemic
House prices have had their biggest January increase since before the pandemic, according to Rightmove, yet the number of homes for sale is historically low
By Katie Binns • Published
-
How are mortgage payments calculated?
When looking at how are mortgage payments calculated you’ll need to factor in the size of the mortgage, the interest rate and how long it’ll last.
By Rebecca Goodman • Published
-
House selling costs and process explained
There's lots to think about when it comes to house selling costs, here we outline everything you need to factor into your budget
By Rebecca Goodman • Published