House prices fall at the fastest rate for 14 years

This marks the largest decline in house prices since 2009, 14 years ago.

Nationwide have also warned that the market is at risk of seeing further rises in mortgage rates.

Mortgage rates have been on the rise ever since the Bank of England began to raise their base rates.

Month to month, prices dropped by 0.1%, leaving the average property price for the month at £260,736.

Nationwide added that house prices are still 4% below their August peak.

Falling house prices would be welcomed with open arms by first time buyers, who are currently agonising over how they can get on the property ladder.

To give them a helping hand, Skipton Building Society recently announced they plan to offer no-deposit mortgage products aimed at renters and first-time buyers.

Commenting on the figures, Robert Gardner, Nationwide’s chief economist, said: “Following tentative signs of improvement in April, annual house price growth softened again in May, falling back to -3.4% (from -2.7% in April). However, this largely reflects base effects with prices broadly flat over the month after taking account of seasonal effects. Average prices remain 4% below their August 2022 peak.

“Recent Bank of England data had shown some signs of recovery in housing market activity, although the number of mortgages approved for house purchase in March was still around 20% below pre-pandemic levels.

“Moreover, headwinds to the housing market look set to strengthen in the near term. While consumer price inflation did slow in April, it was a much smaller decline than most analysts had expected. As a result, investors’ expectations for the future path of Bank Rate increased noticeably in late May, suggesting it could peak at 5.5%, well above the 4.5% peak that was priced in around late March. Furthermore, rates are also projected to remain higher for longer”