According to mortgage lender Nationwide, British home prices dropped for the first time in a month since July 2021 last month. This follows market turmoil that occurred during the brief prime ministership of Liz Truss.
After Truss’s $52 billion in unfunded tax cuts led to a fire sale of assets by pension funds and forced the Bank of England to stabilise the market, borrowing costs skyrocketed and many lenders temporarily ceased issuing loans.
According to the Nationwide Building Society, house prices decreased by 0.9% in October after remaining unchanged in September. Year-over-year, they are now 7.2% higher than in September, which is a slowdown from the 9.5% annual increase in September. Reuters polled economists, and they predicted an annual increase of 8.3%.
The turmoil that followed the mini-Budget undoubtedly had an effect on the market because it caused market interest rates to spike, according to Robert Gardner, chief economist at Nationwide.
Even though Truss undid many of her tax cut policies and fired her finance minister, Kwasi Kwarteng, it wasn’t enough to keep her in office; last week, Rishi Sunak took over as prime minister.
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