High interest rates and the customary summer slump have been blamed after UK house prices suffered their sharpest annual drop in 14 years.
Prices fell by 4.6% in August, the biggest year-on-year decrease since 2009, according to data released by Halifax. Rival lender Nationwide last week put the drop at 5.3%.
Based on the Halifax figures, the price tag of a typical UK home has slipped by about £14,000 over the past 12 months to £279,569. Although this is “the lowest level since early 2022”, said The Guardian, average prices are still £40,000 “higher than before the pandemic”, when lockdowns “fuelled demand for larger homes in a ‘race for space’”.
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The latest fall suggests homeowners “continue to be deterred by high interest rates”, the paper added. And with Halifax predicting further falls in property prices into the new year, this could “come as a relief to those hoping to get on to the property ladder”.
All the same, said the BBC, first-time buyers still “face relatively high repayment costs”, alongside other cost-of-living pressures such as higher prices in the shops.
With higher rates making the cost of buying a home more expensive, it has become more of a “buyers’ market”, said The Independent, with some sellers needing to “adjust their expectations” about the price they are likely to achieve. “Going forward”, further “downward pressure” on house prices is expected, it added.
The managing director of Barrows and Forrester, James Forrester, offered a less gloomy angle. The sharp annual decline will “certainly spur panic”, he told Property 118, but “it’s important to remember that this time last year the market was flying high at the peak of the pandemic price boom, so it would have taken a monumental spike in market activity this time around to avoid an annual decline”.
