The constructing society’s home worth index reveals that the annual charge of home worth progress remained damaging at -3.8%, down from -3.5% in June. July noticed home costs fall 0.2% month-on-month.
UK home costs fell final month on the quickest annual charge in 14 years, in keeping with Nationwide.
The worth fall signifies the quickest drop since 2009 as rising rates of interest put the brakes on the housing market.
In line with Nationwide’s figures, the price of a typical house is now £260,828, down from £262,239 in June. The worth of a typical house is now 4.5% beneath the August 2022 peak of £273,751.
The Financial institution of England has raised rates of interest 13 occasions since December 2021 in an try and curb hovering inflation. Charges are anticipated to rise once more this Thursday, from 5% to five.25%. Increased rates of interest affect consumers’ capability to purchase a house with a mortgage.
Nationwide’s chief economist Robert Gardner mentioned:
“Buyers’ views in regards to the probably path of UK rates of interest have been risky in current months, with the projected financial institution charge peak fluctuating between 5% in mid-Could and 6.5% in early July. There was a slight tempering of expectations in current weeks however longer-term rates of interest, which underpin mortgage pricing, stay elevated.
In consequence, housing affordability stays stretched for these seeking to purchase a house with a mortgage. For instance, a potential purchaser, incomes the common wage and seeking to purchase the standard first-time purchaser property with a 20% deposit, would see month-to-month mortgage funds account for 43% of their take house pay (assuming a 6% mortgage charge). That is up from 32% a yr in the past and nicely above the long-run common of 29%. Furthermore, deposit necessities proceed to current a excessive hurdle – with a ten% deposit equal to 55% of gross annual common earnings.”
