LONDON, Dec 29 Reuters British house prices fell by 1.8 in the 12 months to December, recording the biggest decline over the course of a year since 2008 during the global financial crisis, mortgage lender Nationwide said on Friday.

A Reuters poll of economists had pointed to a drop of 1.4.

In monthonmonth terms, prices in December were flat compared with November.

Britain39;s housing market, which enjoyed a boom during the COVID19 pandemic, has been hit by higher borrowing costs after the Bank of England pushed up interest rates in its battle to tame inflation.

But a fall in mortgage rates in recent weeks has led to signs that the market might have bottomed out.

Housing market activity was weak throughout 2023, said Robert Gardner, chief economist at Nationwide, noting the impact of higher borrowing costs and that house prices had fallen by almost 4.5 from an alltime high recorded in 2022.

December39;s 1.8 yearoveryear drop in house prices was the steepest since a 15.9 decline in December 2008, Nationwide data showed.

A rapid rebound in housing activity or prices next year appears unlikely, he added.

If the economy remains sluggish and mortgage rates moderate only gradually, as we expect, house prices are likely to record another small decline or remain broadly flat perhaps flat to down 2 over the course of 2024, Gardner said.

He pointed to low consumer confidence, subdued levels of buyer enquiries among house surveyors and the risk of interest rates staying…