House prices see biggest fall for two years

House prices saw a sharp slowdown in annual growth during November, the Nationwide has said, as rising interest rates hit the market.

Annual house price growth fell to 4.4% from 7.2% in October, the building society said.

Prices during November fell 1.4% from the month before, which was the largest monthly fall since June 2020.

The lender added that the housing market looked set to "remain subdued" in the coming months.

Earlier this month, the government's official forecaster predicted that house prices will fall for the next two years.

A drop of 9% is expected between now and autumn 2024, the Office for Budget Responsibility said.

Nationwide said the housing sector was still being affected by the fallout from September's mini-budget, which triggered a rise in mortgage rates and also led lenders to suspend hundreds of mortgage products amid turmoil on the financial markets.

"While financial market conditions have stabilised, interest rates for new mortgages remain elevated and the market has lost a significant degree of momentum," said Robert Gardner, Nationwide's chief economist.

"Housing affordability for potential buyers and home movers has become much more stretched at a time when household finances are already under pressure from high inflation."