La baisse continue des prix immobiliers au Royaume-Uni et son impact économique

UK House Prices Continue to Decline

House prices in the UK have experienced a fourth consecutive monthly decline, with the biggest drop occurring in the south-east of England, according to lender Halifax. The average house price fell by 2.4% on an annual basis in July, slightly less than the 2.6% drop in June. On a monthly basis, prices fell by 0.3% in July. The average UK home now costs £285,044, down from a peak of £293,992 in August last year. However, Halifax predicts a gradual decline in prices rather than a steep drop.

Downward Pressure on Property Prices in Southern England and Wales

The housing market in southern England and Wales is facing the most downward pressure on property prices, according to Halifax. Kim Kinnaird, director of Halifax Mortgages, noted that while prices have decreased for four consecutive months, the declines have been smaller than 0.5%. In fact, prices have remained relatively unchanged over the past six months, with the average property costing £285,044 in July compared to £285,660 in February. The pace of annual decline also slowed to 2.4% in July, compared to 2.6% in June.

Cooling Effect of Higher Interest Rates

These recent figures indicate that higher interest rates have had a cooling effect on the housing market. Nationwide, another lender, reported that house prices fell at the fastest annual rate in 14 years last month, dropping by 3.8%. Online portal Rightmove also reported a decrease in the average price of homes coming onto the market in July.

The Daily Lightning

Today's concept is the "wealth effect." The wealth effect is an economic theory that suggests individuals tend to spend more as the value of their assets, such as homes, increases. On the flip side, when asset values decline, individuals tend to spend less. The decline in house prices in the UK can be linked to the wealth effect. As house prices continue to fall, homeowners may feel less wealthy and therefore reduce their spending, which can have a negative impact on the overall economy.