London house prices increased £40,361 on average over the past 12 months (David Cheskin/PA)
(Picture: PA Wire)The average UK house price slipped back in July from a record high the previous month, marking the first month-on-month dip since June last year, according to an index released today.
Following a year of exceptionally strong growth, house prices fell by 0.1 per cent month on month in July, Halifax said. This represented a £365 month-on-month fall in cash terms, from June’s record average house price high of £293,586.
Across the UK, the annual rate of price growth slowed to 11.8 per cent, down from 12.5 per cent in June. A typical UK property now costs £293,221.
In London, the average house price increased by £40,361 to £551,777 — a 7.9 per cent rise.
Wales was at the top of Halifax’s table for annual house price inflation, with prices there increasing by 14.7 per cent.
In Scotland, the average house price was at a record high of £203,677, although it did see a slight slowdown in annual growth in July, to 9.6 per cent from 9.9 per cent the previous month. It comes after the Bank of England raised the base rate by 0.50 percentage points on Thursday, taking it from 1.25 per cent to 1.75 per cent, marking the biggest single rate jump since 1995.
This will add around £50 per month to average tracker mortgage costs, according to calculations from trade association UK Finance.
Russell Galley, managing director, Halifax, said: “It’s important to note that house prices remain more than £30,000 higher than this time last year.
“While we shouldn’t read too much into any single month, a slowdown in annual house price growth has been expected for some time.
“Leading indicators of the housing market have recently shown a softening of activity, while rising borrowing costs are adding to the squeeze on household budgets against a backdrop of exceptionally high house price to income ratios.
“That said, some of the drivers of the buoyant market we’ve seen over recent years — such as extra funds saved during the pandemic, fundamental changes in how people use their homes, and investment demand — still remain evident.
“Looking ahead, house prices are likely to come under more pressure as those market tailwinds fade further and the headwinds of rising interest rates and increased living costs take a firmer hold.
“Therefore a slowing of annual house price inflation still seems the most likely scenario.”
Anna Clare Harper, director of real estate technology platform IMMO, said: “This slight cooldown will be welcomed by those struggling with affordability constraints.”
Nicky Stevenson, managing director of estate agent Fine & Country, said: “Cheap debt is fast disappearing and, against this backdrop, we can expect to see a dampening effect as purchasing power continues to be eroded.”
