House prices maintain a downward trend in the United Kingdom, with a monthly fall of 1.9% recorded in August and 4.9% compared to the previous year, according to the latest report from the Halifax financial institution. The bank specializing in mortgage loans projects further reductions in the value of residential properties until the end of the year and throughout 2023.
The decline of 1.9% between July and August is the most pronounced since last November, while an annual drop of 4.9% has not been experienced since 2009. The reduction in the prices of houses and flats offered on the market affected all regions and nations of the country, although it has been most pronounced (-5%) in the south-east of England.
London continues to be the most expensive area to settle in the United Kingdom, despite a reduction in market prices of 4.1%, which places the value of an average home at 379,565 pounds (442,146 euros) in the capital, agreement with the currency exchange this Friday. The national average for the same type of residence stands at £279,569, with a decrease of £5,000 since July.
Kim Kinnaird, director of Mortgages in Halifax, recognizes the “resilience” of the property market during this phase of periodic increases in interest rates agreed by the Bank of England in order to contain the crisis of the high cost of living. The Consumer Price Index (CPI) moderated its rise to 5.8% in July, below the peak of 11.1% recorded in November.
Further increases in interest rates are still expected – they were set at 5.25% at the summer meeting – although various analysts venture that the cost of mortgages has already peaked. Even so, loans have become more expensive since 2022, which is affecting the real estate market.
The result, according to the Halifax expert, is a situation of increasing volatility that can lead those looking for their first home or the regular investor to postpone the operation until rates stabilize and the horizon for mortgage premiums becomes clearer. “The market will continue to adjust until it finds a balance where buyers feel comfortable facing mortgage costs at levels much higher than we have experienced in the previous 15 years,” explains Kinnaird.
The Halifax analyst warns that UK house prices remain above pre-pandemic levels. They have been revalued by 17% – about 40,000 pounds (46,5000 euros) – in cash.