30th Dec 2022 15:57
(Alliance News) - London-listed housebuilders rounded off a difficult 2022 with another share price decline on Friday, as traders fret over a tough market outlook amid rising mortgage rates.
Data from Nationwide failed to soothe any fears on Friday, despite the mortgage lender reporting the pace of UK house price declines eased this month.
However, a fourth price fall in-a-row meant it was the worst run for the housing market since the financial crisis of 2008, the building society said.
In December, house prices fell 0.1% on a monthly basis, easing from a monthly fall of 1.4% in November. On an annual basis, house prices rose 2.8% in December, slowing from to growth of 4.4% the month before.
The average UK house price stood at GBP262,068 in December, down from GBP263,788 a month before.
Analysts at Capital Economics commented: "The slowdown in house price falls in December is little comfort when leading indicators point to further sharp declines. Despite mortgage rates edging lower in recent weeks, we continue to think that both further falls in mortgage rates and lower house prices are needed before house prices can stabilise."
Nationwide Chief Economist Robert Gardner said that "financial market conditions have settled" but mortgage rates are taking a longer to calm.
"The housing market has shown few signs of recovery," Gardner cautioned.
The economist added: "It will be hard for the market to regain much momentum in the near term as economic headwinds strengthen, with real earnings set to fall further and the labour market widely projected to weaken as the economy shrinks."
Barratt Developments PLC closed 3.1% lower on Friday, the worst FTSE 100 performer. Persimmon PLC fared only slightly better, down 3.0%.
Barratt shares have fallen some 45% in 2022, while Persimmon has lost around 57%.
By Eric Cunha, Alliance News news editor
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