By Emily Hawkins
House prices marked their first decrease since June last year, dropping slightly last month to stand at an average price of £293,221.
Prices fell by a marginal 0.1 per cent in July, according to Friday’s Halifax House Price Index.
The annual rate of growth eased to +11.8 per cent (from +12.5 per cent), with Wales showing the strongest annual growth in the country.
“While we shouldn’t read too much into any single month, especially as the fall is only fractional, a slowdown in annual house price growth has been expected for some time,” Russell Galley, Halifax managing director, said.
“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.”
Market drivers still remained, such as “extra funds saved during the pandemic, fundamental changes in how people use their homes, and investment demand,” he said.
“The extremely short supply of homes for sale is also a significant long-term challenge but serves to underpin high property prices.”
Prices were expected to come under more pressure as “the headwinds of rising interest rates and increased living costs take a firmer hold,” with Galley forecasting a slowing of annual house price inflation as “the most likely scenario.”
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