UK House Prices Falling at Fastest Rate in 14 Years as Interest Rate Hike Takes Its Toll

LONDON – House prices in Britain are falling at the fastest rate in the last 14 years, according to figures from leading building societies. According to data released yesterday by Nationwide, one of the leading mortgage providers in the country, the rate of price reduction in the months of April and May is 3.4 percent. A similar fall in house prices in the country was in July 2009 at the height of the global economic recession.

The housing market fell as the Bank of England’s big hike in base interest rates began to affect mortgage rates. Although this is not evident in the big cities, including London, the market slowdown is evident in rural areas and small towns. Experts believe that the rise in mortgage rates will further weaken the market in the coming days.

Interest rates have been raised 12 times in a row since covid. The Bank of England had increased the base interest rate from the nominal rate of 0.25 to 4.5. The aim is to prevent uncontrolled price inflation in the property market. Although house prices are falling, no one wants to buy a new house due to the fear of a big increase in mortgage rates.

In Britain, it is not profitable even to buy a house and rent it out at a high rate. Figures released by Nationwide indicate that in many places the mortgage is not being repaid with the rent received.

English Summary: UK house prices fall at fastest rate in 14 years, interest rate hike benefits nobody

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2023-06-01 14:30:11

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