Annual house price growth turned negative in February, falling to its weakest level since 2012, according to the latest Nationwide House Price Index. 

House prices fell 1.1% year-on-year in February – the first annual decline since June 2020 and the weakest since November 2012. 

Between January and February, house prices dropped by 0.5% to £257,406, equal to a fall of £891, and prices are now 3.7% lower than their August peak last year. 

Robert Gardner, Nationwide’s chief economist, said: “The recent run of weak house price data began with the financial market turbulence in response to the mini-Budget at the end of September last year. While financial market conditions normalised some time ago, housing market activity has remained subdued. 

“This likely reflects the lingering impact on confidence as well as the cumulative impact of the financial pressures that have been weighing on households for some time. Indeed, inflation has continued to outpace wage growth and mortgage rates remain significantly higher than the lows recorded in 2021. Even though consumer sentiment has improved in recent months, it is still languishing at levels prevailing during the depths of the financial crisis. 

“It will be hard for the market to regain much momentum in the near term since economic headwinds look set to remain relatively strong, with the labour market widely expected to weaken as the economy shrinks in the quarters ahead, while mortgage rates remain well above the lows prevailing in 2021.”