London: Real estate prices in the UK fell 3.4 per cent on average in the year to May, the biggest decline since 2009, a mortgage lender said in a report.
In May, houses cost 260,736 pounds ($326,552) on average, Xinhua news agency quoted the report by Nationwide Building Society.
This price represented a 0.1 per cent decrease from April and remained 4 per cent below the August 2022 peak, it said.
The downward trend suggests buyers remain cautious about their spending, senior UK economist Gabriella Dickens at Pantheon Macroeconomics consultancy said.
Furthermore, following the release of April’s inflation data, the markets expect mortgage rates to rise again in the coming months, Dickens added.
The UK’s Consumer Price Index (CPI) rose by 8.7 per cent in the 12 months to April, greatly exceeding the consensus expectation and the Bank of England’s (BoE) forecast.
To combat high inflation, the BoE has raised its benchmark interest rate to 4.5 per cent, the highest level since 2008.
A typical household now will see 28 per cent of their disposable incomes sucked up by mortgage payments, compared to 22 per cent two years ago, Dicken said.