Nationwide warns that house prices could fall

Nationwide has warned that house prices may cool this year as the rising cost of living puts pressure on people’s finances. The building society said that while house prices have been increasing at double-digit rates so far this year, they could start falling again. “Higher property prices and interest rates, together with steep increases in the cost of living, mean housing has become less affordable and we expect housing market activity to slow and the rate of house price growth to moderate in the coming quarters,” it said in an update on Friday. “There is a risk of a downward movement in house prices, given the pressure on household budgets.” Inflation reached a 40-year high in the year to April, hitting 9% as measured by the Consumer Prices Index. There is a risk of a downward movement in house prices, given the pressure on household budgets. Although unemployment remains low, this is still squeezing household budgets very hard, especially among those on lower incomes who were unable to save, or saved less, during the pandemic. “We will continue to plan for geopolitical risks and economic pressures arising directly and indirectly from the war in Ukraine, notably the rising energy bills and inflation, which are intensifying pressure on household budgets, which are already under strain,” said chairman Kevin Parry. 

The Independent (21/05/2022)