How rising interest rates sent the UK housing market into reverse

An end to ultra-low rates mean borrowers can only afford smaller mortgages

• BoE boss says interest rates may have peaked
• UK house prices fall at fastest annual rate since 2012

Since the turn of the year the news on the economy has been less bad than expected. Growth has been a bit stronger, spending in the shops a touch higher, business and consumer confidence have both picked up.

There has, however, been one big exception to this trend - the state of the housing market. The Nationwide building society reported on Wednesday that prices were down for a sixth month in a row in February, leading to a 1.1% annual drop in property values.