UK home costs fall for first time since June 2021, says Halifax | Housing market

UK home costs fell for the primary time in additional than a yr in July, because the nation’s largest lender warned of the affect of upper rates of interest and the broader price of dwelling disaster.

The common worth of a house was £293,221 final month, down 0.1% month on month, the primary lower since June final yr, in accordance with the most recent report from Halifax.

The marginal drop pushed down the annual charge of progress from 12.5% to 11.8%, though total home costs stay greater than £30,000 greater than on the similar time final yr.

“Whereas we shouldn’t learn an excessive amount of into any single month, particularly as the autumn is just fractional, a slowdown in annual home worth progress has been anticipated for a while,” mentioned Russell Galley, the managing director of Halifax.

“Main indicators of the housing market have just lately proven a softening of exercise, whereas rising borrowing prices are including to the squeeze on family budgets.”

Nonetheless, Galley added that among the components which have pushed the red-hot progress of the housing market by means of the coronavirus pandemic stay, similar to cash saved throughout lockdown and the hunt for extra rural areas and spacious properties with the appearance of versatile and distant working practices.

“Wanting forward, home costs are more likely to come below extra strain as these market tailwinds fade additional and the headwinds of rising rates of interest and elevated dwelling prices take a firmer maintain,” Galley mentioned. “Subsequently, a slowing of annual home worth inflation nonetheless appears the almost certainly situation.”

On Thursday, the Financial institution of England introduced its greatest improve in rates of interest in 27 years in an try to curb hovering inflation as gasoline costs drive up UK vitality payments this winter. The 0.5% rise to 1.75% takes the UK rate of interest to a 13-year excessive and is the sixth rise in a row.

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Halifax mentioned that properties in Wales confirmed the strongest annual home worth inflation, up by 14.7%, with a mean property costing £222,639.

It’s carefully adopted by the south-west of England, the place there was annual home worth progress of 14.3%, with a mean property costing £310,846.

There was a slight slowdown in Scotland, from 9.9% to 9.6%, with a typical house costing £203,677.

In Northern Eire there was an easing within the annual charge of home worth inflation to 14%, with a mean house costing £187,102.

Higher London recorded the slowest charge of annual home worth progress of any area within the UK, at 7.9%, though it additionally has the best common property price at £551,777.

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