Yahoo Finance UK houses more than £14,000 cheaper as prices continue to fall
UK house price growth was at its weakest point since July 2009 in August, softening 5.3% from August's peak last year, after a 3.8% pullback in July, according to new data from Nationwide.
Prices fell by 0.8% over the month, after taking account of seasonal effects, the building society said.
This represents annual fall of about £14,600 on a typical home. The average price of a house in the UK is now £259,153.
“The softening is not surprising, given the extent of the rise in borrowing costs in recent months, which has resulted in activity in the housing market running well below pre-pandemic levels," said Nationwide's chief economist Robert Gardner.
“While activity is likely to remain subdued in the near term, healthy rates of nominal income growth, together with modestly lower house prices, should help to improve housing affordability over time, especially if mortgage rates moderate once bank rate peaks."
Nationwide also found in its monthly monitor that in the first half of the year, cash purchases, though down from the 2021 highs, have been remarkably resilient, while purchases involving a mortgage have slowed much more sharply.
The UK central bank has raised interest rates 14 consecutive times in an effort to reduce runaway inflation, which stood at 6.8% in July, above its 2% target.
The latest rise, which was widely expected by economists, means UK interest rates are at a 15-year high.
Read more: London leaseholders hit by doubling service charges
The new data comes amid news that UK mortgage approvals fell to their lowest level in five months in July, down from 54,600 in June to 49,400 as fewer people were able to afford a home.
According to the Bank of England (BoE) on Wednesday it was the lowest figure since February and below economists expectations of a drop to 51,000 as rising interest rates continued to dampen demand. The figures were also down almost 22% on a year earlier.
The data showed that the number of approvals for remortgaging increased slightly during the period from 39,100 to 39,300.
Meanwhile, online real estate portal Zoopla projected the biggest dip in housing sales for a decade in 2023.
The monthly monitor found that sales volumes were down 20% so far compared with 2022 and forecast sales to be the lowest since 2012 by the end of the year.
Watch: Lloyds faces housing chill as profit growth stalls