| Independent journalism, powered by our readers. | |
|
 UK house prices fell by 5.3% from their peak in August 2022 to this year, the fastest decline since 2009, when the financial crisis caused the housing market to seize up, according to data from Nationwide.
The annual fall in prices was significantly faster than the 3.9% that economists had expected, according to a poll by Reuters, and beat last month’s 3.8% fall. Prices dropped 0.8% month on month in August.
It means the average UK home – which costs about £259,000 – is about £14,600 cheaper.
Even if the pace of the downturn in prices is unexpected, precisely nobody is surprised that prices are falling: inflation is eating into disposable income and the Bank of England has raised the cost of borrowing dramatically in order to counter further inflationary pressures.
Robert Gardner, Nationwide’s chief economist, said the decline was “not surprising” given the rise in borrowing costs and the decline in mortgage approvals, but he was still hopeful that “a relatively soft landing is still achievable, providing broader economic conditions evolve in line with our (and most other forecasters’) expectations”.
He said: "In particular, unemployment is expected to remain low (below 5%) and the vast majority of existing borrowers should be able to weather the impact of higher borrowing costs, given the high proportion on fixed rates, and where affordability testing should ensure that those needing to refinance can afford the higher payments.
"While activity is likely to remain subdued in the near term, healthy rates of nominal income growth, together with modestly lower house prices, should help to improve housing affordability over time, especially if mortgage rates moderate once Bank Rate peaks."
Most rail services in England will not run on Friday because of the Aslef train drivers’ union strike, with a further day of severe disruption on Saturday, when train staff in the RMT will take action again, in the long-running dispute over jobs and pay.
Unions are also protesting over the closure of ticket offices, with a government consultation closing today. The unions argue the closures will negatively affect passengers but some rail companies argue they will be able to move staff into other parts of stations.
Stock markets are up and running and the FTSE 100 has gained 0.2% in the early trades.
France's Cac 40 is down 0.2%, Spain's Ibex is up 0.1% and Germany's Dax is down 0.1%.
The agenda
• 9am BST: eurozone HCOB/S&P Global manufacturing purchasing managers’ index (August; previous: 43.7 points; consensus: 43.7)
• 9.30am BST: UK Cips/S&P Global manufacturing purchasing managers’ index (August; previous: 42.5; consensus: 42.5)
• 1.30pm BST: US non-farm payrolls (August; previous: 187,000; consensus: 170,000)
We’ll be tracking all the main events throughout the day ... |
| Sign up to What's On | | Get the best reviews, the latest news and exclusive writing direct to your inbox every Monday in our free TV newsletter | | Newsletters may contain info about charities, online ads, and content funded by outside parties | | |
|
|
|
| Manage your emails | Unsubscribe | Trouble viewing? | | You are receiving this email because you are a subscriber to Business Today. Guardian News & Media Limited - a member of Guardian Media Group PLC. Registered Office: Kings Place, 90 York Way, London, N1 9GU. Registered in England No. 908396 |
|
|
|
|
The Tories let the City run out of control. Now Labour plans to repeat their mistakes 
