According to an index Halifax has warned that house prices are falling at their fastest rate in 12 years at 2.6% which equates to around £7,500 wiped off the average price.
Halifax said that on a month-on-month basis house prices fell for the third month in a row, “albeit a modest one.”
Kim Kinnaird, director, Halifax Mortgages, said: “The average UK house price fell slightly in June, down by around £300 compared to May, with a typical property now costing £285,932.
“This was the third consecutive monthly fall, albeit a modest one.
“The annual drop of 2.6% is the largest year-on-year decrease since June 2011.
“With very little movement in house prices over recent months, this rate of decline largely reflects the impact of historically high house prices last summer – annual growth peaked at 12.5% in June 2022 – supported by the temporary stamp duty cut.”
John Choong, market and equity analyst at InvestingReviews.co.uk, said, “With the average fixed mortgage rate now firmly above 6%, the housing market should brace for an onslaught. This is especially the case in the South of England, which is under the most pressure.
“Household incomes are getting squeezed by the month due to Andrew Bailey’s complacency and incompetence. With a terminal rate of 7% rate now being priced in, mortgage rates could skyrocket to 8% or higher, potentially triggering a crash in the housing market.
“One of the few positives is that the unemployment levels remain low while the household savings ratio remains above pre-pandemic levels.
“More importantly, over 70% of mortgages are held by the UK’s top 40% of earners, thereby making defaults less likely.
“If inflation continues to remain sticky for the foreseeable future, the rapid tightening of monetary policy could trigger a recession, leading to higher unemployment and a bloodbath in the housing market.”
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