Average UK house price drops month-on-month for first time since June 2021

The average UK house price fell in July from a record high the previous month, marking the first month-on-month fall since June last year, an index showed.

After a year of exceptionally strong growth, house prices fell 0.1% month on month in July, Halifax reported.

This represented a £365 month-on-month drop in cash, compared to the record average house price in June of £293,586.

In the UK, the annual rate of price growth slowed to 11.8% from 12.5% ​​in June.

A typical UK property now costs £293,221.

Wales topped the Halifax chart for annual house price inflation, with prices there rising by 14.7%.

In Scotland, the average house price hit a record high of £203,677, although it saw a slight slowdown in annual house price growth in July to 9.6% from 9.9% in the month previous.

In London, already record house prices were pushed even higher in July.

The average house price in the capital has risen by £40,361 over the past year, Halifax said.

Russell Galley, Managing Director, Halifax, said: “It is important to note that house prices remain more than £30,000 higher than at the same time last year.

“While we shouldn’t read too much on a single month, especially since the fall is only fractional, a slowdown in annual house price growth has been expected for some time.

“Leading housing market indicators have recently shown slowing activity, while rising borrowing costs are adding to the squeeze on household budgets amid unusually high house price-to-income ratios.

“That said, some of the dynamic market drivers we’ve seen in recent years – such as the extra cash being saved during the pandemic, fundamental changes in how people use their homes and investment demand – remain evident.

A typical UK property now costs £293,221 (PA)

“The extremely limited supply of homes for sale is also a significant long-term challenge, but serves to support high property prices.

“Looking ahead, house prices are likely to come under further pressure as these market tailwinds fade further and the headwinds of rising interest rates and rising costs of living settle more firmly.

“As a result, a slowdown in annual house price inflation still seems the most likely scenario.”

Anna Clare Harper, director of real estate technology platform IMMO, said: “This slight slowdown will be welcomed by those struggling with affordability constraints.”

Jason Tebb, managing director of property search website OnTheMarket.com, said: “The number of properties coming to market is slowly increasing, in part due to seasonal effects as we expect higher levels of increased stock are available.”

Nicky Stevenson, chief executive of estate agent group Fine & Country, said: “Cheap debt is rapidly disappearing and against this backdrop we can expect to see a dampening effect as purchasing power continues to rise. ‘erode.

“Although the housing market and the wider economy do not always move in tandem, the recession predicted by the Bank of England is bound to have an effect on growth and consumer confidence.”

A package of government cost-of-living support measures are being rolled out in the coming months as households face the prospect of rising bills and falling real incomes for some time to come.

Alice Haine, personal finance analyst at Bestinvest, said: “Once a recession sets in, the threat of job losses will rear its ugly head – damaging buyer confidence and dampening the market in the process.

Realtor windowAn expert says this week’s interest rate hike could hurt the housing market (PA)

“The real turning point could be the Bank of England’s decision yesterday to raise interest rates to 1.75%.”

The Bank of England on Thursday raised the base rate by 0.50 percentage points from 1.25% to 1.75%, marking the biggest single rate jump since 1995.

This will add around £50 a month to average follow-on mortgage costs, based on average outstanding balances, according to calculations by trade association UK Finance.

In a grim warning on Thursday, the Bank said people face two years of falling household incomes, with inflation expected to climb to over 13% and the economy plunging into the longest recession since the financial crisis. .

The Bank’s Monetary Policy Committee (MPC) expects inflation to peak at 13.3% in October, the highest in more than 42 years.

In real terms, after-tax household income would fall by 1.5% this year and 2.25% the following year.

It would be the first time since records began in the 1960s that household incomes have fallen for two consecutive years.

Here are the average house prices in July, followed by the annual increase in house prices, according to Halifax:

– East Midlands, £243,197, 12.2%

– East of England, £342,687, 12.2%

– London, £551,777, 7.9%

– North East, £170,688, 11.3%

– North West, £226,665, 12.6%

– Northern Ireland, £187,102, 14.0%

– Scotland, £203,677, 9.6%

– South East, £399,003, 11.9%

– South West, £310,846, 14.3%

– Wales, £222,639, 14.7%

– West Midlands, £250,051, 12.7%

– Yorkshire and Humber, £205,249, 10.4%

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