House prices are continuing to fall across the UK as high interest rates make it harder for buyers to afford a new mortgage.
The latest monthly report from Halifax shows that average house prices in August 2023 were 4.6% lower than in the same month a year ago, representing a decrease of £14,000 for the average home.
It’s the biggest annual fall in 14 years, although the mortgage lender noted that this is relative to the record high property prices seen last summer.
The average home now costs £279,569, down by around £5,000 since July, and back to the level seen at the start of last year. Prices are still £40,000 higher than before the pandemic.
“We may now be seeing a greater impact from higher mortgage costs flowing through to house prices,” said Kim Kinnaird, director of Halifax Mortgages.
“The market will continue to rebalance until it finds an equilibrium where buyers are comfortable with mortgage costs in a higher range than seen over the previous 15 years.”
Halifax expects further downward pressure on house prices through to the end of this year and into 2024.
