House prices in the UK fell more than expected as mortgage costs spiked

Nationwide Building Society reported that housing costs in the UK have plummeted more than experts anticipated. The first fall in prices took place at the beginning of the pandemic. It was caused by a sharp rise in borrowing costs, driving down demand in the country. 

Statistics for November showed that house prices fell 1.4%. The last jump was seen, except for a pandemic, in 2008, when the world experienced a financial crisis. Economists predicted a decline by 0.4%, almost three times higher than experts estimated.

The cost of mortgages in the UK has reached 6% in recent weeks. The indicator exceeded the previous year's level, fluctuating around 1%. This was due to investor fears about slower economic growth and rising public debt, combined with the Bank of England’s hike in the benchmark lending rate. 

As stated by Robert Gardner, Nationwide's chief economist, interest rates on new mortgages continue to be high. Therefore, there is a downturn in the housing market. So, potential buyers are currently limited in purchasing real estate. Rising inflation is also having a negative impact on household incomes.