House prices fall for the first time in a year, Halifax says

House prices fall for the first time in a year, says Halifax, as interest rate hikes put pressure on buyers… but the median home is still £293,221.

  • The median house price in the UK is now £293,221
  • The growth rate fell from 12.5% ​​in June to 11.8% last month
  • Wales showed the strongest annual growth in the UK as prices rose 14.7%

UK house prices fell slightly in July, falling 0.1 per cent compared to the previous month, the first decline since June 2021.

The annual growth rate also slowed with prices rising 11.8 percent in the 12 months through July, compared with a 12.5 percent rise through June, according to Halifax.

A typical UK property now costs £293,221.

The drop in growth is the first decline since June 2021 according to Halifax

Russell Galley, Halifax’s managing director, said: “While we shouldn’t read too much into a single month, especially as the drop is only fractional, a slowdown in annual house price growth is expected for some time.”

“Leading housing market indicators have recently shown weakening activity, while rising borrowing costs add to shrinking household budgets amid exceptionally high house price-to-price ratios. income”.

“Looking ahead, house prices are likely to come under more pressure as market tailwinds further fade and headwinds from rising interest rates and rising cost of life take a firmer grip. Therefore, a slowdown in annual house price inflation remains the most likely scenario.’

Financial pressure on households and high income to price ratios mean a slowdown in property prices as expected.

Financial pressure on households and high income to price ratios mean a slowdown in property prices as expected.

Tom Bill, head of UK residential research at Knight Frank, said: ‘Negligible monthly declines in house price growth will become more pronounced. Mortgages have gotten noticeably more expensive in recent months, which will reduce demand as cheaper offers made earlier this year expire and people accept fixed-rate offers. At the same time, supply has risen as distortions from the pandemic and stamp duty holiday fade, putting downward pressure on prices.

The latest set of economic predictions from the Bank of England will weigh on sentiment, as they did in May, but housing and labor market fundamentals are strong and we would expect double-digit annual growth to turn into single-digit growth by the end of January. year.’

Wales experienced the highest house price inflation in July, with prices rising 14.7%, with an average property price of £222,639. Close behind is the South West of England, which also continues to post a strong annual growth rate, up 14.3 per cent, with an average cost of ownership of £310,846.

While London continues to record slower annual house price inflation than other UK regions, the growth rate of 7.9 is the highest in almost five years. With the average property now costing £551,777, the already record-breaking median house price in the capital continues to rise, up to £40,361 over the past year.

Iain McKenzie, CEO of The Guild of Property Professionals, says: ‘When we’ve become so used to seeing house prices soar every month, it would be easy to get too excited about this unknown drop.

‘The truth is that the housing market has proven resilient to the broader struggles of the economy, and this decline is likely to herald a slight cooling in prices rather than something more dramatic.

“Yesterday’s interest rate hike is another factor slowly slowing down the market, adding to the pressures of the cost of living crisis and challenging the price-income ratio.

“However, market fundamentals remain strong and there is still a large imbalance between the demand for properties and the number offered for sale.”

First-time buyer homes saw price inflation drop to 10.7 percent in July, down from 12.4 percent in June. The growth rate continues to lag price increases for movers which posted a 12 percent increase in July, down from 12.5 percent in June.

Price growth for larger properties continues to outpace smaller homes, with the median price for a single-family home rising 15.1% over the year, compared to 7.7% for condos. These are increments of £60,860 and £11,962 respectively.

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