Home costs fell for the third month in a row as a typical property tumbled in worth by round £300, new information from Halifax has revealed.
The home value index recorded a 0.1% drop in property values in June while, over the yr, they fell by 2.6%.
It means the typical dwelling within the UK now prices £285,932 in comparison with £293,992, when it hit the height in August final yr.
Kim Kinnaird, director at Halifax Mortgages, defined the annual drop of two.6% – or £7,500 in money phrases – was the biggest year-on-year lower since June 2011.
“With little or no motion in home costs over current months, this price of decline largely displays the affect of traditionally excessive home costs final summer season,” she defined.
Certainly, annual progress peaked at 12.5% in June 2022 – largely because of the stamp responsibility vacation.
However she acknowledged the current mortgage price hikes which have made borrowing far more costly for householders can have performed a job within the house price decline.
“The housing market stays delicate to volatility in borrowing prices,” she stated. “Considerations about persistent inflation have led to a major improve in the price of funding. Coupled with base price rising by one other 50bp, this contributed to a giant bounce in typical mortgage charges over the past month.
“The ensuing squeeze on affordability will inevitably act as a brake on demand, as patrons think about what they’ll realistically afford to supply.”
How are home value falls impacting patrons and sellers?
With the markets forecasting a Financial institution of England base price rise of over 6%, Kinnaird thinks the probability of mortgage charges remaining increased for longer plus the squeeze on family funds will proceed to hit house prices, forcing them to fall additional over the approaching yr.
Studies from property brokers recommend there’s nonetheless curiosity in shopping for properties, though it’s extra prone to come from money patrons.
Jeremy Leaf, north London property agent and a former RICS residential chairman, stated: “On the bottom, gross sales are nonetheless continuing typically to those that should not depending on mortgage finance however they’re taking longer and sometimes contain protracted renegotiations leading to modest, fairly than massive, value falls.”
In the meantime Nicky Stevenson, managing director at nationwide property agent group Fine & Country, stated purchaser curiosity was on a par with 2019, which she described as a ‘pretty typical’ yr for the property market in comparison with the frenzy that adopted.
“Demand continues to outpace provide in lots of locations,” she stated. “The homes attracting the most interest and gives are people who look moderately priced and take account of decreased family shopping for energy.
“Patrons are additionally taking a look at properties the place there’s scope for negotiation, and the prospect of securing an excellent value on their subsequent house is incentivising them to the market.”
