UK Nationwide house prices fell by 0.9% in October month-on-month versus zero growth for September. House prices grew by 7.2% year-on-year falling short of analysts’ expectations and dropping from the prior month’s reading of 9.5%.

This is a significant miss both in terms of the month-on-month figure and the year-on-year number, with monthly house price growth falling into negative territory. The fallout from the mini-budget exacerbated existing pressures from the Bank of England’s rate hiking path to send mortgage rates soaring, sharply dampening demand for UK houses and punishing property prices. On top of that, the market is dealing with a weakening consumer as the cost-of-living crisis squeezes household budgets as well as the looming threat of recession.

The Nationwide house price figure is now significantly below the official UK inflation rate, suggesting that the economic and political uncertainty of recent weeks have had a major negative impact on the market. Many potential first-time buyers in particular are getting priced out of the market given the surge in borrowing costs, while international investors in UK property are holding off until political stability is restored, and mortgage premiums ease off.