Halifax’s House Price Index for July shows a slight price dip and an annual reduction of 2.4%, with house prices ‘little changed’ over the past six months.

House prices went down slightly in July by 0.3%, according to Halifax. The lender has published its latest House Price Index and revealed that the July dip is the fourth consecutive monthly decline in house prices. However, the declines have been small.

‘Average UK house prices edged down slightly in July, with the monthly fall of 0.3% equivalent to a drop of around £1000 in cash terms,’ says Kim Kinnaird, Director, Halifax Mortgages. ‘While this was the fourth consecutive monthly decrease, all have been smaller than 0.5%.’

The typical UK home now costs £285,044 compared to £293,992 in August 2022. Southern England and Wales have seen the most downward pressure on property prices.

Where are the biggest house price dips?

According to Halifax, the South East remains the area where house prices are facing the most downward pressure. Prices in this region are down by 3.9% annually, with the price of a typical property down by £15,500 in the last year, bringing the average price down to £382,489.

London has seen average property prices down by 3.5%, bringing the average house price in the capital down to £531,141.

Wales previously saw rapid price growth during the pandemic ‘boom’ but has seen a 3.3% reduction annually, bringing the average price down to £214,495.

In Scotland, prices are down by less, with an annual dip of 0.7%, bringing the average house price to £201,501.

House prices are ‘little changed’

‘In reality, prices are little changed over the last six months, with the typical property now costing £285,044, compared to £285,660 in February,’ adds Kinnaird. ‘The pace of annual decline also slowed to 2.4% in July versus 2.6% in June. These figures add to the sense of a housing market which continues to display a large degree of resilience in the face of tough economic headwinds.’

First-time buyer activity is holding up well, perhaps due to rental costs going up. Halifax says there are indications that first-time buyers are searching for smaller properties to cope with higher borrowing costs.

‘Prospects for the UK housing market remain closely linked to the performance of the wider economy,’ adds Kinnaird. ‘Several factors are providing support, notably strong wage growth, running at around 7% annually.’

Borrowing costs to remain a challenge

Halifax says better inflation figures tempered the base rate increase on 3 August – inflation went down from 8.7% in May to 7.9% in June. That said, the lender predicts that borrowing costs will remain a challenge for many people. ‘While there have been recent signs of borrowing costs stabilising or even falling, they will likely remain much higher than homeowners have become used to over the last decade,’ adds Kinnaird. ‘The continued affordability squeeze will mean constrained market activity persists, and we expect house prices to continue to fall into next year.’

However, Halifax predicts a ‘gradual’ rather than a steep decline in house prices and predicts it is unlikely to reverse the house price growth recorded over previous years fully.

more news