# UK house prices end 2022 on a weaker note after pandemic boom Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-12-30 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: UK House Prices See Sharp Slowdown in December Meta Description: British annual house price growth experienced a significant slowdown in December, ending the year on a downbeat note as surging mortgage costs reversed the URL: https://financedigest.com/uk-house-prices-end-2022-on-a-weaker-note-after-pandemic-boomhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2022-12-30t071018z2lynxmpeibt040rtroptp4britain-economy-houseprices-1736814654239-compressed.jpg) By Muvija M LONDON (Reuters) -British annual house price growth marked a further “sharp” slowdown in December, mortgage lender Nationwide said, ending the year on a downbeat note as the impact of surging mortgage costs reversed some of the pandemic-led boom in the market. The lender also said that the final month of 2022 saw prices record their worst run since 2008 on a monthly basis, falling 0.1% compared with November in their fourth consecutive monthly price fall. A [Reuters poll](https://www.financedigest.com/germany-home-prices-to-sink-nearly-6-this-year-reuters-poll.html "Germany home prices to sink nearly 6% this year – Reuters Poll") of economists had pointed to a fall of 0.7%. In annual terms, [house price](https://www.financedigest.com/uk-house-prices-stabilise-after-four-month-fall-halifax-says.html "UK house prices stabilise after four-month fall, Halifax says") growth slowed to 2.8% in December from 4.4% in November, Nationwide said, compared with the 2.3% growth forecast in a Reuters poll. House prices have weakened in recent months as former Prime Minister Liz Truss’s plans for unfunded tax cuts spooked markets and drove up borrowing costs, making [home loans less affordable](https://www.financedigest.com/still-living-at-home-a-third-of-the-nation-cant-afford-to-rent.html "Still living at home? A third of the nation can’t afford to rent") and causing lenders to suspend mortgage products at one point. That has marked a slowdown from last year when [price growth reached multi-year highs due to strong demand](https://www.financedigest.com/musk-says-tesla-price-cuts-triggered-demand-2023-sales-could-hit-2-million-vehicles.html "Musk says Tesla price cuts triggered demand, 2023 sales could hit 2 million vehicles") as people desired bigger homes more suited for remote working during the health crisis. While financial market conditions have settled, mortgage rates are taking longer to normalise and activity in the [housing market has shown few signs](https://www.financedigest.com/discount-dining-clubs-tastecard-and-gourmet-society-grow-their-offering-as-chimichanga-and-spaghetti-house-both-sign-up.html "Discount dining clubs tastecard and Gourmet Society grow their offering as Chimichanga and Spaghetti House both sign up") of recovery,” Nationwide chief economist Robert Gardner said in a statement. It will be hard for the market to regain much momentum in the near term as economic headwinds strengthen, with real earnings [set to fall further and the labour market widely projected to weaken as the economy](https://www.financedigest.com/uk-economy-set-for-smaller-hit-in-2023-than-previously-feared-imf.html "UK economy set for smaller hit in 2023 than previously feared – IMF") shrinks. NEW YEAR ACTIVITY Earlier in December, a survey by the Royal Institution of Chartered Surveyors (RICS) showed the most widespread [house price falls](https://www.financedigest.com/buy-off-plan-to-beat-stalling-house-prices-and-falling-rental-yields-says-jean-liggett.html "“Buy off-plan to beat stalling house prices and falling rental yields” says Jean Liggett ") in Britain since early in the pandemic last month. RICS’ [chief economist Simon Rubinsohn had said the downbeat tone reflected “the uncertain macro environment and the higher cost of mortgage finance”](https://www.financedigest.com/bootmaker-dr-martens-warns-on-profit-as-finance-chief-walks.html "Bootmaker Dr Martens warns on profit as finance chief walks"). Nationwide’s Gardner, who reiterated on Friday a previous prediction that house prices were on track to drop by about 5% next year, also said the recent weakness in [mortgage applications may partly reflect an early](https://www.financedigest.com/7-questions-to-ask-before-paying-off-your-mortgage-early.html "7 Questions to Ask Before Paying Off Your Mortgage Early") seasonal slowdown. He said that the [housing market remaining buoyant in the first three quarters of 2022 despite weak](https://www.financedigest.com/uk-housing-market-weakness-continues-improvement-on-the-horizon-rics.html "UK housing market weakness continues, improvement on the horizon – RICS") consumer confidence gave some reassurance that there would be a pick-up in activity in the New Year. Longer-term [interest rates](https://www.financedigest.com/ecbs-centeno-says-interest-rate-close-to-peaking-if-no-new-shocks.html "ECB’s Centeno says interest rate close to peaking if no new shocks"), which underpin mortgage pricing, have returned towards the levels prevailing before the mini-Budget. If sustained, this should feed through to mortgage [rates and help improve the affordability position for potential](https://www.financedigest.com/oil-dips-as-potential-fed-rate-hike-overshadows-falling-stocks.html "Oil dips as potential Fed rate hike overshadows falling stocks") buyers,” he added. (Reporting by Muvija M; Editing by Alex Richardson, Louise Heavens and William Schomberg) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---