Nationwide – annual house price growth drops to 1.1% in January

UK Nationwide house prices grew by 1.1% year-on-year in January, falling short of estimates for growth of 1.9%. On a monthly basis, the figure declined by 0.6% also underperforming forecasts for a decline of 0.3%, representing the fifth consecutive monthly drop. Nationwide said economic headwinds are set to remain strong in the near-term.

UK house price growth has fallen to the lowest level since mid-2020 at the height of the pandemic. Pressures from the cost-of-living crisis with sky high inflation, squeezed household budgets and rising interest rates are dampening demand in the UK property market. Potential buyers appear to be holding off for now until prices cool further and mortgage rates ease. With the Bank of England expected to raise rates again by 50 basis points, buyers look set to wait until we move beyond the peak for interest rates and lending affordability improves once again.

 

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