UK house prices have witnessed a fall for the fourth consecutive month in July, according to a report by mortgage lender Halifax. Despite the fall, the market is showing signs of resilience in the face of rising borrowing costs. Demand from first-time buyers remains steady while the buy-to-let sector faces pressure.
The report reveals that UK house prices fall by 0.3% from June. And in year-on-year terms, they were down by 2.4%. Although this represents a slightly smaller drop compared to June’s 2.6% decline. It marked the most significant fall since June 2011.
Halifax highlights that first-time buyers continue to show interest, with some seeking smaller homes to offset the Bank of England’s decision to increase borrowing costs in response to high inflation.
On the other hand, the buy-to-let sector appears to be under pressure, indicating a potential increase in homes being put up for sale. This trend could contribute to alleviating the longstanding shortage of properties on the market. It has been a key factor driving high valuations.
Commenting on the situation, Kim Kinnaird, the Director of Halifax Mortgages, predicts that house prices are likely to continue falling into the next year. However, she emphasizes that this decline is expected to be gradual and not a sudden drop. Kinnaird believes it is unlikely to fully reverse the house price growth recorded over recent years.
According to Halifax, despite the recent slide, average UK house prices are still approximately £45,000 ($57,253.50) or 19% above pre-coronavirus levels.
The housing market’s resilience amid challenging economic conditions showcases its ability to adapt to fluctuations and changing dynamics. As economic assumptions evolve, analysts are closely monitoring developments. To gauge the future trajectory of house prices in the UK.
