LONDON, Dec 30 Reuters British annual house price growth marked a further sharp slowdown in December, mortgage lender Nationwide said, ending the year on a downbeat note as the impact of surging mortgage costs reversed some of the pandemicled boom in the market.

The lender also said that the final month of 2022 saw prices record their worst run since 2008 on a monthly basis, falling 0.1 compared with November in their fourth consecutive monthly price fall. A Reuters poll of economists had pointed to a fall of 0.7.

In annual terms, house price growth slowed to 2.8 in December from 4.4 in November, Nationwide said, compared with the 2.3 growth forecast in a Reuters poll.

House prices have weakened in recent months as former Prime Minister Liz Truss39;s plans for unfunded tax cuts spooked markets and drove up borrowing costs, making home loans less affordable and causing lenders to suspend mortgage products at one point.

That has marked a slowdown from last year when price growth reached multiyear highs due to strong demand as people desired bigger homes more suited for remote working during the health crisis.

While financial market conditions have settled, mortgage rates are taking longer to normalise and activity in the housing market has shown few signs of recovery, Nationwide chief economist Robert Gardner said in a statement.

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…