U.K. house prices skidded in July by the most in 14 years, a leading mortgage provider said Tuesday.
Nationwide reported a 0.2% seasonally adjusted change in July to take its home price index down 3.8% year-over-year.
The decline in home prices comes as the Bank of England has aggressively raised interest rates to fight inflation, which at nearly 8% is one of the highest in the industrialized world.
Nationwide pointed out the market’s forecast for peak bank rate has moved as high as 6.5%. Unlike in the U.S., most homes have mortgages from two to five years in the U.K., making the housing market more interest-rate sensitive.
According to Nationwide, a prospective buyer earning the average wage and buying the typical first-time buyer property with a 20% deposit would see monthly mortgage payments of 43% of take-home pay, up from 32% a year and above the long-run average of 29%.
In June, there were 86,000 housing transactions, down 15% year-over-year.
