UK house prices drop by most since 2009: Nationwide

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.

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