UK house prices fell at the fastest pace in almost two and a half years last month, as rising interest rates put off buyers.
Average house prices fell by 1.4% on a seasonally adjusted basis in November, figures just released by Nationwide building society show - the largest month-on-month fall since June, 2020.
That follows a 0.9% drop in October, indicating that the housing market is cooling after strong growth since the pandemic began.
This has contributed to house price growth across the year to suffer a "sharp slowdown" falling to 4.4% from 7.2% in October.
The lender added the housing market looked set to "remain subdued" in the coming months.
The average house price in November was £263,788, Nationwide Building Society said.
According to analysts Moneyfacts the typical two-year fixed rate mortgage interest rate is at 6.01%. This time last year it was at 2.34%.
Mortgage rates jumped following the mini-budget in September, with Bank of England base rate rises also pushing up borrowing costs, against a backdrop of households being squeezed by rising bills generally.
Earlier this month, the government's official forecaster predicted that house prices will fall by 9% over the next two years as affordability issues weigh on demand.
The findings build on wider evidence of a market slowdown linked to rising flexible mortgage rates after successive rises to the base interest rate by the Bank of England since December last year to tackle soaring inflation.
Nationwide said it was clear that wider mortgage conditions were yet to recover from the financial market meltdown that followed Liz Truss government's mini-budget growth plan in September, which hammered confidence in the UK's public finances.
Lenders withdrew offers and temporarily halted deals as the value of the pound hit a record low and borrowing costs surged.
Nationwide's chief economist, Robert Gardner, said: "A lot of this reflects the fallout of the mini-budget and the big rise that we saw in mortgage rates, because that really did change the affordability calculations for prospective buyers and really made things a lot less affordable."
He added: "If you look at the typical mortgage payment as a share of someone's take-home pay, for the typical first-time buyer that was running at close to long-run averages of 30%. But as a result of the mini-budget it's moved up to around 45% of take-home pay, which is clearly a massive difference."
Property website Zoopla reported that homes had been typically selling for 3% below their asking price in recent weeks and warned that figure was likely to deteriorate further next year.
Tom Bill, head of UK residential research at estate agent Knight Frank, said: “The impact of the mini-budget continued to reverberate in November, with the largest monthly fall in house prices since the early days of the pandemic.”
He continued: “Mortgage rates should keep edging downwards as the effects of the mini-budget wash through the system, which should settle the nerves of buyers and sellers, even as a 13-year period of ultra-low borrowing costs comes to an end.
“We expect house prices to fall by 10% over the next two years and the reality of higher rates will bite more after Christmas. Mortgage offers made before the mini-budget will begin to lapse and increase downwards pressure on prices from 2023.”
Read more by Martin Williams