Average UK house prices fell by 0.3 percentage points over July, the fourth consecutive monthly decline, Halifax’s House Price Index has revealed.
Halifax Mortgages director, Kim Kinnaird, pointed out that, while house prices have fallen for the fourth month in a row, each drop has been smaller than 0.5 percentage points.
“In reality, prices are little changed over the last six months, with the typical property now costing £285,044 compared to £285,660 in February”, she explained.
However, this remained below the peak of £293,992 which was recorded last August.
The index also revealed that property prices fell by 2.4 percentage points on an annual basis, easing slightly from the annual fall of 2.6 percentage points recorded in June.
The index also found average house prices fell on an annual basis in almost all parts of the UK in July, with the only exception being the West Midlands where they remained flat.
The South East remained the area where house prices are facing the most downward pressure, down 3.9 percentage points on an annual basis.
This trend was mirrored in greater London, with average property prices down by 3.5 percentage points to £531,141.
Prices in Wales experienced a fall of 3.3 percentage points while, in Scotland, prices were down by 0.7 percentage points.
Kinnaird added: “These figures add to the sense of a housing market which continues to display a degree of resilience in the face of tough economic headwinds.
“In particular, we’re seeing activity amongst first-time buyers hold up relatively well, with indicators some are now searching for smaller homes, to offset higher borrowing costs.
This sentiment was echoed by Shaw Financial Services founder, Lewis Shaw, who said: "We've seen more first-time buyers in the past two weeks than in the previous two months.
“First-time buyers are in an incredibly strong position, and it's not uncommon to see them agreeing on purchases at 10 per cent to 15 per cent below the marketed price. It must be hard going for estate agents trying to manage vendor expectations.
“However, this is a sign of the times, and those sellers that don't take a fair offer now could find they're much more out of pocket in a month or two."
The Kushman Group director, Kundan Bhaduri, added: “At long last the ongoing fall in house prices will achieve what many have been waiting for, namely a chance to get onto that first rung of the property ladder.
“This decline is helping improve affordability for first-time buyers, who have been struggling to enter the market due to high deposit requirements and rising costs of living.
“This slowdown in house price growth was a long time coming and is a perfect opportunity to rebalance the market and prevent a potential bubble.
While first time buyers may be in a strong position, Kinnaird added that the buy-to-let sector appears to be under some pressure.
She explained that it remains to be seen how many landlords may choose to exit the market and what that could mean for the supply of properties available to buy.
“Expectations of further base rate increases from the Bank of England were tempered by a better-than-expected inflation report for June," she added
“However, while there have been recent signs of borrowing costs stabilising or even falling, they will likely remain much higher than homeowners have become used to over the last decade.”
tom.dunstan@ft.com
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