The average UK house price falls monthly for the first time since June 2021

According to the index, the average UK house price fell in July from a record high in the previous month, marking the first monthly fall since last June.

After a year of exceptionally strong growth, house prices fell 0.1% on a monthly basis in July, Halifax said.

This represents a drop of £365 month-on-month in monetary terms from the record high median house price in June of £293,586.

In the UK, annual price growth slowed to 11.8% from 12.5% ​​in June.

A typical British property is now worth £293,221.

Wales was at the top of the Halifax table for annual house price inflation, where prices rose by 14.7%.

In Scotland, the median home price was at a record high of £203,677, although July saw a slight slowdown in annual house price growth to 9.6% from 9.9% the previous month.

In London, already record house prices rose even higher in July.

The average home price in the capital has increased by £40,361 over the past year, Halifax said.

A slowdown in annual housing price growth has been expected for some time.Russell Halley, Halifax

Russell Galley, managing director of Halifax, said: “It is important to note that house prices remain more than £30,000 higher than at the same time last year.

“While we should not fixate on any one month, especially since the fall is only partial, a slowdown in annual house price growth has been expected for some time.

“Housing market leading indicators have been declining of late, while rising borrowing costs exacerbate pressure on household budgets amid exceptionally high home price-to-income ratios.

“However, some of the drivers of a buoyant market that we have seen in recent years, such as additional funds saved during the pandemic, fundamental changes in how people use their homes and investment demand, are still evident.

A slowdown in annual house price inflation still seems the most likely scenario.Russell Halley, Halifax

“The extreme shortage of homes for sale is also a major long-term problem, but it keeps property prices high.

“Looking ahead, home prices are likely to come under more pressure as these market tailwinds ease further and headwinds in the form of rising interest rates and rising costs of living become more robust.

“Therefore, a slowdown in annual house price inflation still seems like the most likely scenario.”

Anna Clare Harper, director of real estate technology platform IMMO, said: “This short break will be welcomed by those who are struggling with affordability restrictions.”

Jason Tebb, chief executive of real estate search website OnTheMarket.com, said: “The number of properties coming on the market is slowly increasing, in part due to seasonal effects when we expect higher levels of inventory to become available.”

Nicky Stevenson, managing director of Fine & Country real estate group, said: “Cheap debt is rapidly disappearing and against this backdrop we can expect a dampening effect as purchasing power continues to decline.

“While the housing market and the economy as a whole do not always move in tandem, a recession projected by the Bank of England is bound to affect economic growth and consumer confidence.”

The real turning point could be the Bank of England’s decision yesterday to raise interest rates to 1.75%.Alice Hein, Bestinvest

A government cost-of-living support package will be provided in the coming months, with households facing the prospect of skyrocketing bills and shrinking real incomes for some time.

Alice Hein, personal finance analyst at Bestinvest, said: “Once a recession kicks in, the threat of job losses rears its ugly head, eroding consumer confidence and weakening the market in the process.

“The real turning point could be the Bank of England’s decision yesterday to raise interest rates to 1.75%.”

The Bank of England raised its benchmark rate by 0.50 percentage points on Thursday, from 1.25% to 1.75%, the biggest single rate hike since 1995.

According to trade association UK Finance, this would add about £50 per month to the average mortgage cost, based on the average outstanding balance.

In a grim warning Thursday, the Bank said people face two years of falling household incomes, with inflation set to rise to more than 13% and the economy plunge into its longest recession since the financial crisis.

The bank’s Monetary Policy Committee (MPC) forecasts inflation peaking in October at 13.3%, the highest in more than 42 years.

On a real basis, after-tax household income should fall by 1.5% this year and 2.25% next.

This will be the first time since records began in the 1960s that household incomes have fallen for two consecutive years.

Here are the average house prices in July and then the yearly rise in house prices, according to Halifax:

– East Midlands, £243,197, 12.2%

– East of England, £342,687, 12.2%

– London, £551,777, 7.9%

– North East £170,688 11.3%

– North West £226,665 12.6%

– Northern Ireland, £187,102, 14.0%

– Scotland, £203,677, 9.6%

– South East £399,003 11.9%

– South West £310,846 14.3%

– Wales, £222,639, 14.7%

– West Midlands £250,051 12.7%

– Yorkshire and the Humber £205,249 10.4%