UK house prices plummet for fourth consecutive month!

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August 7, 2023

UK house prices have declined for the fourth consecutive month, with the average house price dropping by 2.4% on an annual basis in July. Southern England and Wales are the most affected regions, experiencing the largest downward pressure on property prices. The decline in house prices is consistent with other indicators that suggest higher interest rates have had a cooling effect on the housing market. Landlords are particularly concerned about the combined impact of higher interest rates and potential housing market reforms. Looking ahead, Halifax predicts a gradual decline in house prices in the coming months, but the situation remains uncertain.

UK House Prices Decline for Fourth Consecutive Month

UK house prices have seen a decline for the fourth month in a row, according to a report from lender Halifax. The average house price dropped by 2.4% on an annual basis in July, a slight improvement from the 2.6% drop in June. On a monthly basis, prices fell by 0.3%, bringing the average house price to £285,044. This is a decrease from the peak of £293,992 recorded in August of the previous year.

Regional Impact

Southern England and Wales are the most affected regions, experiencing the largest downward pressure on property prices. In these areas, house prices have fallen by 3.9% and 3.5% respectively. However, Halifax notes that the market is showing some resilience overall.

Impact of Higher Interest Rates

The recent decline in UK house prices is consistent with other indicators that suggest higher interest rates have had a cooling effect on the housing market. Last month, rival lender Nationwide reported the fastest annual rate of house price decline in 14 years, with prices falling by 3.8%. Additionally, online portal Rightmove revealed that the average price of homes coming onto the market fell by £905 or 0.2% in July.

Concerns for Landlords

These trends are causing concern among landlords, who are facing the combined impact of higher interest rates and potential housing market reforms. Halifax warns that the buy-to-let market is particularly vulnerable, as landlords may face challenges in maintaining rental yields and property values.

Future Outlook

Looking ahead, Halifax predicts a gradual decline in house prices in the coming months. This suggests that the housing market may continue to display resilience despite the challenges it faces. However, the situation remains uncertain, with factors such as interest rates, economic conditions, and potential housing market reforms influencing the future trajectory of house prices.

Other News

In other news, European stock markets are expected to open lower following a late drop on Wall Street, which saw the Nasdaq 100 and S&P500 record their worst weekly performances since March. The Bank of England's chief economist, Huw Pill, will hold a Q&A session on the cost of living and current economic conditions, following the recent interest rate hike. Additionally, various UK and US companies are set to release earnings reports, and economic data on Halifax House Prices, Germany Industrial Production, and US Consumer Credit will be published.