House prices fell again in July, according to the country’s biggest mortgage lender Hallifax, but at a slower rate than in June as the housing market continues to be surprisingly resilient to the surge in interest rates.
The average price is down 0.3% month-on-month and down 2.4% year-on-year. But the year-on-year decline was slower than the 2.6% dip in June.
In London, prices were down 3.5% year-on-year.
Kim Kinnaird, director of Halifax Mortgages, noted that nearly all the decline came in the wake of the mini-Budget last year, anbd prices over the last six months had been more or less steady.
“In reality, prices are little changed over the last six months, with the typical property now costing £285,044, compared to £285,660 in February,” Kinnaird said. “The pace of annual decline also slowed to -2.4% in July, versus -2.6% in June. These figures add to the sense of a housing market which continues to display a degree of resilience in the face of tough economic headwinds.
“In particular, we’re seeing activity amongst first-time buyers hold up relatively well, with indications some are now searching for smaller homes, to offset higher borrowing costs. Conversely the buy-to-let sector appears to be under some pressure, though elevated interest rates are just one factor impacting landlords’ business models, together with considerations of future rental market reforms. It remains to be seen how many may choose to exit and what that could mean for the supply of properties available to buy.”
That comes despite 14 consecutive interest rate hikes from the Bank of England, which raised its interest rates to 5.25% last week.
