Halifax says month-on-month fall of 0.4% indicates rate of decline of prices has slowed
House prices fell by 4.7% year-on-year in September, the biggest annual fall in more than 14 years, according to the Halifax.
The mortgage lender’s latest monthly update said prices dipped a further 0.4% in September, taking the average cost of a house to more than 14,000 below the peak seen in August last year.
The September drop – the sixth consecutive fall in prices – took the annual price change to -4.7%, from -4.5% last month, the biggest annual fall since a 5.5% drop in August 2009.
However, the lender said the rate of decline appeared to be slowing, with September’s 0.4% drop following a 1.8% fall in August, and that the average price of a homes, at £278,601, remained over £39,000 higher than the pre-pandemic level.
Prices are also still above the level they were when the Bank of England first began tightening interest rates in December 2021, the Halifax said.
Earlier this month the Nationwide reported stable house prices in September, however, the Halifax data comes a day after purchasing managers reported that a decline in housebuilding output driven by poor demand for homes had led to the steepest drop off in construction activity since the covid pandemic.
Kim Kinnaird, director, 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 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.”
However, Kinnaird added that with the Bank of England’s base rate now likely to be at its peak, fixed rate mortgage deals were “easing back” from recent highs, while wage growth remained strong, further helping with affordability.
The Halifax said house prices had fallen on an annual basis in all UK nations and regions, with the biggest falls in the South east of England, where homes are the most expensive. Homes have fallen in value by an average of £26,514 in London in the last year.
No comments yet