UK home prices fall for third month

London - UK house prices fell for a third month in May, the worst streak for the market in eight years, according to Nationwide Building Society.

Values fell 0.2% from the previous month, taking the annual rate of change down to 2.1%. That’s the weakest year-on-year growth since 2013. The average value last month was £208 711.

Multiple reports are pointing to a housing slowdown, with the Bank of England saying on Wednesday that mortgage approvals fell to a seven-month low in April.

READ: UK mortgage approvals fall, unsecured credit remains strong

Lender Halifax last month said home values recorded their first quarterly decline in more than four years in the three months through April, while annual growth in asking prices has also waned.

While tax changes and uncertainty surrounding Brexit may be putting pressure on parts of the market, housing may also be seeing payback for years of solid price gains that outstripped wage increases. That’s making it far harder for new buyers to enter the market.

Nationwide said values will still rise this year, predicting an average gain of about 2%, largely because Britain isn’t building enough homes and a shortage of properties on the market will put a floor under prices.

“It is too early to conclude whether the slowdown in house price growth is merely a blip, a reflection of the impact of the squeeze on household budgets, or is due to mounting affordability pressures,” said Nationwide chief economist Robert Gardner said.

“Given the ongoing uncertainties around the UK’s future trading arrangements and the upcoming election, the economic outlook is unusually uncertain.”

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