UK house prices declined at the fastest pace in nine months in August as rising mortgage rates and high inflation continue to weigh on housing affordability and demand. <\/p>\n
House prices registered a monthly drop of 1.9 percent, following a 0.4 percent drop in July. This was the biggest fall since November 2022 and also marked the fifth consecutive decrease.<\/p>\n
The year-on-year fall in house prices was 4.6 percent, which was also bigger than the 2.5 percent drop in July. The 4.6 percent decrease was the largest fall since 2009.<\/p>\n
A typical home now costs GBP 279,569. Nonetheless, average prices remained about GBP 40,000 above pre-pandemic levels.<\/p>\n
Halifax Mortgages Director Kim Kinnaird said house prices have proven more resilient than expected so far this year despite higher interest rates weighing on buyer demand. However, there is always a lag-effect. <\/p>\n
Prospective home buyers have deferred transactions in the hope of some stability and greater clarity on the future direction of rates in the coming months. <\/p>\n
The market will continue to rebalance until it finds an equilibrium where buyers are comfortable with mortgage costs in a higher range than seen over the previous 15 years. <\/p>\n
Kinnaird expects further downward pressure on property prices through to the end of this year and into next. <\/p>\n
The Bank of England data released last week showed that mortgage approvals for house purchases slid to a five-month low of 49,444 in July from 54,605 in June. <\/p>\n
The BoE has raised its benchmark rate over the last fourteen consecutive meetings, taking the rate to the highest since early 2008. The bank is widely expected to lift the rate again in September. <\/p>\n