The average cost of a home fell 1.1% from a year ago last month after a gain of the same size in January, Nationwide Building Society said Wednesday. It marked the sixth consecutive monthly drop in prices and the first annual decline since June 2020.

“It will be hard for the market to regain much momentum,” Robert Gardner, Nationwide’s chief economist, said in a statement Wednesday.

“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.”

The report points to a tightening squeeze on consumer spending power after inflation jumped to its highest in 41 years, prompting an unprecedented series of interest rate hikes from the Bank of England. That pushed up the cost of borrowing to levels not seen since the global financial crisis more than a decade ago.

After soaring through the pandemic when the BOE’s key rate was near zero, house prices started sliding late last year and now have clocked up their longest run of monthly declines since 2008 to 2009.

Despite the fall in house prices, homes are still becoming more unaffordable for first-time buyers due to higher mortgage rates and shrinking real wages.

“For a prospective first-time buyer earning the average income looking to buy the typical home, mortgage payments remain well above the long run average as a share of take-home pay,” Gardner said. Deposit requirements were also “prohibitively high” for many.

Nationwide’s report agrees with other surveys pointing to a weakening in the market. Homebuyers are getting the edge in the UK property market as sellers cut their asking prices to get deals done.

The average discount to the asking price to achieve a sale was 4.5% this month, according to a report from property portal Zoopla. That’s the most in more than five years and up from 0.4% in 2022 and 0.6% the year before.