Property price drop unmatched to rising figures seen last year
A UK Bank has discovered that although the average house price has decreased by -2.4% it doesn’t compare to the ‘dramatic’ increase experienced in 2022.
At the beginning of this week Halifax’s latest house price index revealed that the average house price has dropped by -2.4% per year, easing from -2.6% in June, and by -0.3% month on month.
However, Nathan Emerson, chief executive of Propertymark, said even though house prices had fallen year on year, ‘this does not compare to the dramatic price rises that we experienced last year’.
According to the Office of National Statistics, steadily increasing prices throughout 2022 resulted in the average UK house price reaching a record high. In October last year prices hit £296,000, which was £33,000 higher than prices recorded the year before.
In addition, although house prices are now on the downfall, due to inflation rates falling too slowly, the Bank of England announced their 14th interest rate hike meaning people with certain mortgage plans will have to pay more every month. This suggests that the long-haul cost of buying a home is still steep.
Despite this, Emerson has claimed that as house prices begin to steady, and with recent rises in wages, houses are becoming more affordable while equity is remaining stable.
The typical UK home now costs £285,044 compared with the peak of £293,992 last August. Halifax said the market was displaying some resilience with industry data showing increased activity.
Southern England and Wales saw the most downward pressure in property price. Kim Kinnaird, director of Halifax Mortgages, said: ‘Prospects for the UK housing market remain closely linked to the performance of the wider economy.
‘Several factors are providing support, notably strong wage growth, running at around +7% annually. And while the uptick in unemployment is likely to restrain that somewhat, it seems unlikely to reach levels that would trigger a sharp deterioration in conditions.’
Against this backdrop, Emerson added: ‘After recent positive inflation news bringing the potential for a peak in interest rates sooner than previously expected, there is also some hope that fixed mortgage rates will start to fall.
‘Even as they remain high compared with recent standards, buyers are able to negotiate on price and come to a middle ground with sellers still able to make a healthy gain on the final sale price.’
Image: Maria Ziegler