Mon, 02 Oct 2023

LONDON, June 1 (Xinhua) -- Real estate prices in the United Kingdom (UK) fell 3.4 percent on average in the year to May, the biggest decline since 2009, mortgage lender Nationwide Building Society said Thursday.

In May, houses cost 260,736 British pounds (326,552 U.S. dollars) on average. This price represented a 0.1 percent decrease from April and remained 4 percent below the August 2022 peak, Nationwide said.

The downward trend suggests buyers remain cautious about their spending, senior UK economist Gabriella Dickens at Pantheon Macroeconomics consultancy said.

Furthermore, following the release of April's inflation data, the markets expect mortgage rates to rise again in the coming months, Dickens added.

The UK's Consumer Price Index (CPI) rose by 8.7 percent in the 12 months to April, greatly exceeding the consensus expectation and the Bank of England's (BoE) forecast.

To combat high inflation, the BoE has raised its benchmark interest rate to 4.5 percent, the highest level since 2008. A typical household now will see 28 percent of their disposable incomes sucked up by mortgage payments, compared to 22 percent two years ago, Dicken said.

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