House prices fall for the first time in a year, says Halifax

House prices fall for the first time in a year, says Halifax, as interest rate hikes put the squeeze on buyers… but the average home still costs £293,221

  • Average house price in the UK is now £293,221
  • Rate of growth fell from 12.5% in June to 11.8% last month
  • Wales  showed the strongest annual growth in the UK as prices rose 14.7%

House prices in the UK fell slightly in July dropping 0.1 per cent compared to the month before, the first decrease since June 2021.

The annual rate of growth also eased with prices rising 11.8 per cent in the twelve months to July, compared with a rise of 12.5 per cent to June, according to Halifax.

A typical UK property now costs £293,221.

The dip in growth is the first time decrease since June 2021 according to Halifax 

Russell Galley, managing director, Halifax, said ‘While we shouldn’t read too much into any single month, especially as the fall is only fractional, a slowdown in annual house price growth has been expected for some time. 

‘Leading indicators of the housing market have recently shown a softening of activity, while rising borrowing costs are adding to the squeeze on household budgets against a backdrop of exceptionally high house price-to-income ratios.’

‘Looking ahead, house prices are likely to come under more pressure as those market tailwinds fade further and the headwinds of rising interest rates and increased living costs take a firmer hold. Therefore a slowing of annual house price inflation still seems the most likely scenario.’

Financial pressure on households and high income to price ratios mean a slowdown in property prices as been expected.

Financial pressure on households and high income to price ratios mean a slowdown in property prices as been expected.

Wales saw the greatest house price inflation in July with prices up 14.7 per cent, with an average property price of £222,639. It’s closely followed by the South West of England, which also continues to record a strong rate of annual growth, up by 14.3 per cent, with an average property cost of £310,846.

While London continues to record slower annual house price inflation than the other UK regions, the rate of 7.9 growth is the highest in almost five years. With an average property now costing £551,777 the capital’s already record average house price continues to push higher, up by £40,361 over the last year.

First time buyer homes saw a drop in price inflation to 10.7 per cent in July, down from 12.4 per cent in June. The rate of growth continues to lag behind price rises for home movers which saw an increase of 12 per cent in July, down from 12.5 in June.

Price growth for larger properties continues to outpace smaller homes, the average price for a detached house rose 15.1 per cent over the year, compared to 7.7 per cent for flats. These are increases of £60,860 and £11,962 respectively.

Best mortgage rates and how to find them

Mortgage rates have risen substantially as the Bank of England’s base rate has climbed rapidly.

If you are looking to buy your first home, move or remortgage, it’s important to get good independent mortgage advice from a broker who can help you find the best deal. 

To help our readers find the best mortgage, This is Money has partnered with independent fee-free broker L&C.

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