UK house prices declined for the third consecutive month in June, according to the latest monthly report from the Halifax.
A typical property now costs £285,932. This is down by around £300 or 0.1% compared to May and a drop of £7,500 or 2.6% on an annual basis — the largest year-on-year decrease since June 2011.
“This rate of decline largely reflects the impact of historically high house prices last summer — annual growth peaked at 12.5% in June 2022 — supported by the temporary Stamp Duty cut,” explained Kim Kinnaird, Halifax’s director of mortgages.
Kinnaird noted that the volume of mortgage applications held up well throughout June, particularly from first-time buyers. However, the housing market remains sensitive to volatility in borrowing costs.
“Concerns about persistent inflation have led to a significant increase in the cost of funding,” Kinnaird added. “Coupled with base rate rising by another 50bp, this contributed to a big jump in typical mortgage rates over the last month.
“The resulting squeeze on affordability will inevitably act as a brake on demand, as buyers consider what they can realistically afford to offer.”
With the base rate now anticipated to peak at over 6%, mortgage rates are likely to remain higher for longer, and the squeeze on household finances will continue to put downward pressure on house prices over the coming year.
