LONDON (Reuters) -British house prices fell by 3.8% in annual terms in July, the largest drop since July 2009, mortgage lender Nationwide said on Tuesday.
The reading was in line with the consensus from a Reuters poll of economists.
House prices fell 0.2% month-on-month, Nationwide said.
The survey chimed with other gauges of the housing market that point to weak activity caused by rising interest rates which have pushed mortgage rates above 6% for home buyers and existing mortgagors looking to refinance.
Nationwide chief economist Robert Gardner said the typical first-time buyer with a deposit of 20% would see mortgage payments at current rates account for 43% of their take-home pay – up from 32% a year ago.
“This challenging affordability picture helps to explain why housing market activity has been subdued in recent months,” Gardner said.
(Reporting by Andy Bruce; Editing by Kate Holton)
