U.K. Home Prices Decline for Third Month

• U.K. Home Prices Decline for Third Month

The prices of home in the U.K. plunged for a third month in May, making it the worst longest streak for the housing market since 2009.

Prices declined 0.2 percent from the previous month, while on yearly basis prices dipped by 2.1 percent. The weakest yearly growth in 4 years.

Multiple reports are pointing to a housing slowdown, with the Bank of England saying on Wednesday that mortgage approvals fell to a seven-month low in April. Lender Halifax last month said home values recorded their first quarterly decline in more than four years in the three months through April, while annual growth in asking prices has also waned.

While tax changes and uncertainty surrounding Brexit may be putting pressure on parts of the market, housing may also be seeing payback for years of solid price gains that outstripped wage increases. That’s making it far harder for new buyers to enter the market.

Nationwide said values will still rise this year, predicting an average gain of about 2 percent, largely because Britain isn’t building enough homes and a shortage of properties on the market will put a floor under prices.

“It is too early to conclude whether the slowdown in house price growth is merely a blip, a reflection of the impact of the squeeze on household budgets, or is due to mounting affordability pressures,” said Nationwide Chief Economist Robert Gardner said. “Given the ongoing uncertainties around the U.K.’s future trading arrangements and the upcoming election, the economic outlook is unusually uncertain.”

The average value last month was 208,711 pounds ($268,400).