The bank of England has hiked the interest rates by 0.75%, the biggest rise for more than 30 years.
UK house prices fell last month for the first time in more than a year as the market chaos sparked by the government's mini Budget drove up borrowing costs and hit household finances.
Nationwide yesterday said that residential property prices fell 0.9% between September and October - the first month-on-month drop since July 2021 when a cut to stamp duty was being phased out, and the greatest decline since June 2020 at the height of the coronavirus pandemic. Annual growth in house prices slowed from 9.5% to 7.2%.
Property Industry Eye
Chancellor Jeremy Hunt has axed the majority of tax cuts from the mini-budget but changes to stamp duty remain in place.
The move should bring stability to the mortgage market.
But interest rates are still expected to rise and the housing market slowdown is likely to continue.
Several major lenders have increased how far in advance existing borrowers can lock in a new mortgage deal as interest rates rise. It comes as many homeowners look to start the process of lining up a new mortgage earlier than usual, hoping to get a cheaper deal and stay ahead of future rate hikes after the base rate hit 2.25% in September.
The Bank of England has raised interest rates by half a percentage point to 2.25% - the highest level since November 2008.