Halifax believes UK house prices will continue falling into next year
The UK’s biggest mortgage lender has revealed the prices of homes has fallen by over 4%, although the rate of reduction has slowed down.
Between August and September the average UK house price was down 0.4%, according to new data found by Halifax. The research shows the reduction is following a slimming trend that began in April but has become a lot slower.
In August Halifax reported that the average property price fell by 4.6% on an annual basis – the largest year-on-year house price decrease experienced since 2009.
However, although high interest rates have contributed to the cooling of house costs, in September property prices reduced by 0.4% whereas in August they fell by 1.8%, displaying they are reducing at a much slower pace.
According to the latest Halifax house price index data, a typical home now costs £278,601 – a drop of around £1,200 from August. Despite this sum equating to a cost that would have been seen in early 2022, prices are up 1% since 2021, which is when the Bank of England began hiking up interest rates.
Looking into the data more closely, the South of England saw the most downward pressure on property prices, falling by 5.7% over the last year. The average house price there is now £376,450.
In Northern Ireland the costs of homes don’t seem to want to drop so easily as the average price of a property there is £184,108, representing a fall of less than £400.
Against this backdrop, property prices in Scotland and Wales look to be falling at a ready rate. In Scotland prices have dropped by 0.8% and the average cost of a home is now £201,594 and in Wales they have reduced by 3.6% and homes now cost around £214,585.
Kim Kinnaird, director of Halifax Mortgages said: ‘Activity levels continue to look subdued compared to recent years, with industry data showing lower levels of new instructions to sell homes and agreed sales.
‘Borrowing costs are the primary factory, given the impact of higher interest rates on mortgage affordability. Against this backdrop homeowners inevitably become more realistic about their target selling price, reflecting what has increasingly become a buyer’s market.’
‘However, with Base Rate now likely to be at or around its peak, we are seeing fixed rate mortgage deals ease back from recent highs,’ Kim said. ‘Wage growth also remains strong, which has helped with affordability, with the house price to income ratio now at its lowest level since June 2020 (6.2 in September vs 6.3 in August).’
Image: Anja Bauermann
House prices have fallen at the fastest rate for over a decade
