UK house prices fell for a fifth straight month in January, the longest string of declines since the financial crisis more than a decade ago, according to the Nationwide Building Society.
Annual house price growth slowed to 1.1 per cent, from 2.8 per cent in December. Moreover, January recorded a further monthly price fall of 0.6 per cent, which left prices 3.2 per cent lower than their peak last August.
The monthly decline was also more than economists had expected.
The average UK house price dropped to £258,297 ($318,250) as the Nationwide said the housing market is unlikely to pick up in the coming months.
UK household mortgage payments could be added to if the Bank of England raises interest rates for the 10th consecutive time on Thursday.
“The overall affordability situation looks set to remain challenging in the near term,” said Robert Gardner, Nationwide’s chief economist.
“There are some encouraging signs that mortgage rates are normalising, but it is too early to tell whether activity in the housing market has started to recover.”
Affordability problem
Even though house prices are coming down, the Nationwide said that affordability pressures are still “particularly acute” in London and the south of England.
London continues to have the highest house price to earnings ratio at 9.2, taking first-time homebuyers with a typical wage 15 years to save a 20 per cent deposit.
“Saving for a deposit is proving a struggle for many given the rising cost of living, especially those in the private rented sector where rents have been rising at their strongest pace on record,” Mr Gardner said.