Yahoo Finance UK house prices fall by more than £15,000 in a year
UK house prices fell further in September, edging down by -0.4% on a monthly basis with the average home now costing £278,601.
This is a drop of around £1,200 since last month, marking the sixth consecutive monthly fall.
The latest house price index data from Halifax also showed that on an annual basis, property prices declined 4.7%, that's a decline of £15,234 compared to the average price of a home in September 2022.
However, homes were still more than £39,000 above pre-pandemic levels.
Higher rates for longer expectations
Many economists and financial markets predict that the Bank of England (BoE) Base Rate will remain higher for longer, with any significant cuts appearing unlikely until inflation gets closer to its 2% target.
In September, the BoE left its key interest rate on hold at 5.25% — which is a 15-year high — after 14 consecutive rises.
“Overall, these factors are likely to keep mortgage rates elevated in comparison to recent years, constraining buyer demand and putting downward pressure on house prices into next year,” Kim Kinnaird, director at Halifax Mortgages, said.
However, With the BoE Base Rate now likely to be at or around its peak, fixed rate mortgages deals are easing back from recent highs.
Lower levels of instructions to sell homes
“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," Kinnaird said.
“Borrowing costs are the primary factor, 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.
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“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).”
Prices across nations and regions
Halifax said the South East of England continues to see the most downward pressure on property prices, falling by -5.7% over the last year with the average house price at £376,450.
Northern Ireland currently has the most resilient house prices, down by -0.2%, compared to this time last year, with the average house price at £184,108, a fall of less than £400.
Meanwhile, Scotland also experienced a relatively modest annual decline of -0.8% with the average house price at £201,594.
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Wales saw property prices fall by -3.6% over the last year with the average house costing £214,585.
London, meanwhile, remains the most expensive place in the UK to purchase a home, with an average property costing £525,678. Prices are down by -4.8% over the last year, the biggest fall of any region in cash terms (-£26,514).
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