House prices fell 5.3% year-on-year in August, the sharpest drop in 14 years and a sharper drop than expected, a sign that interest rate hikes are clearly impacting the property sector. (UE Mok/PA) (PA Archive)
House prices fell 5.3% year-on-year in August, the sharpest fall in 14 years and a sharper drop than expected, a sign that interest rate hikes are clearly impacting the property sector.
Princes declined 0.8% month-on-month, while the expected decline was 0.4%. This was much higher than the mild decline seen in the earlier months of this year, but still lower than the decline seen after last year’s mini-budget.
Home prices proved surprisingly resilient even in the face of rising interest rates, but today’s drop suggests that may be starting to change.
James Briggs, head of intermediary sales at Together, said: “Today’s announcement of a fall in house prices may be partly due to buy-to-let (BTL) investors leaving the market, creating more properties. ” Available to first-time buyers and takeaways, resulting in a reduction in demand and prices becoming slightly more affordable.
“While the Halifax UK affordability report indicates housing is now 0.6% more affordable than a year ago1, creating a more favorable environment for both residential and BTL investors, there is uncertainty over whether these current figures are a trend Will continue or will be a brief shock to the market.
“Against this backdrop, lenders will continue to compete with each other for prime borrowers with strong potential; Whereas the specialist loan market will support those who fall outside the standard criteria requirements.
The fall reflects an annual drop of around £14,600 in the average price of a UK house, to £259,153.
Alice Hahn, personal finance analyst at Bestinvest, said: “With the Bank of England likely to push for a 15th interest rate hike at its meeting this month and with further rate hikes likely, the outlook for the property market appears gloomy.” , Mortgage approvals fell by almost 10% in July and net mortgage lending increased by only £200 million on the previous month. Weak credit data will inevitably impact home prices, adding to the impact of already high interest rates on the property market.
Mortgage lenders have been slowly but steadily lowering rates in recent months, but they remain at levels not seen for 15 years.
Source: www.bing.com
