UK house prices have experienced the biggest year-on-year decrease since 2009, Halifax’s House Price Index has revealed.
The index revealed that, in August of this year, house prices fell by 4.6 per cent on an annual basis compared to the 2.5 per cent annual fall recorded in July.
However, the index also acknowledged that house prices were at a record peak last summer.
A sizeable fall was also recorded in the average monthly house price which fell by 1.9 per cent in August, compared to the 0.4 per cent fall recorded in July.
Halifax pointed out this was the largest monthly fall since November 2022 when the average prices fell by 2 percentage points.
Additionally, the index reported that a typical UK home now costs £279,569, a decrease of around £14,000 over the last year and a return to the level seen in early 2022.
However, Halifax also pointed out that average prices remain £40,000 above pre-pandemic levels.
Halifax Mortgages director, Kim Kinnaird, commented: “It’s fair to say that house prices have proven more resilient than expected so far this year, despite higher interest rates weighing on buyer demand.”
However, she warned there is always a “lag-effect” where rate increases are concerned, and the market may now be seeing a “greater impact” from higher mortgage costs flowing through to house prices.
“Increased volatility month-to-month is also to be expected when activity levels are lower, though overall the pace of decline remains in line with our outlook for the year as a whole,” she added.
Hargreaves Lansdown head of personal finance, Sarah Coles, added: “The property market paused for breath in September.
“The question will be whether it’s going to plummet, bounce back, or plateau, and on balance, there’s a good chance it’s going to hold tight.”
Regional changes
All UK nations and the nine English regions registered a decline in house prices over the past year, with northern locations generally proving to be more “resilient” than areas in the south.
Larger deposits and bigger monthly repayments meant that the south east experienced the biggest drops with house prices falling by 5 per cent on an annual basis.
The average price in the South East was now found to be £379,565.
Meanwhile, Wales saw year-on-year property prices fall by 4.7 per cent over the last year with the average house price decreasing to £212,967.
In Northern Ireland, property prices fell by 1.5 per cent annually and, in Scotland, prices fell by just 0.6 per cent annually.
London remained the most expensive place within the UK to purchase a home, with an average property price of £529,814.
However, it was also the region that experienced the biggest fall of any region in cash terms, with a fall of £22,777 to an average price of £529,814.
tom.dunstan@ft.com
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