According to Halifax, house prices in July had fallen by 0.3% and are 2.4% lower compared to a year ago, marking the fourth consecutive monthly decline in 2023.
In light of this, David Hannah, Chairman of Cornerstone Group International – the UK’s leading property tax experts – discusses the current state of the property market.
The mortgage lender reported that the average house price now stands at £285,044, down from a peak of £293,992 last August. However, rival company Nationwide had reported that last week house prices fell at the fastest annual rate in 14 years last month, by 3.8%.
Rightmove has also reported last month that the average price of property coming onto the market fell by 0.2% in July.
While the ongoing fall in house prices may be good news for wealthy buyers, there has been a reduction in the availability of affordable mortgages. Following the Bank of England’s 14th interest rate hike, the average 2-year fixed rate now sits at an uncomfortable 6.7%, whilst 5-year fixes are at 6.18%. Hannah points out that whilst interest rates remain high, they may have now peaked and could fall towards the end of the year and into early 2024.
David Hannah, Chairman at Cornerstone Group International said, “The predictable downward trend in house prices comes as no surprise, given the lingering effects of rate uncertainty and affordability challenges in the market.
“Prospective buyers are still caught between adopting a cautious approach and displaying heightened assertiveness while making property offers.
“Nevertheless, there is a glimmer of hope as certain lenders are reducing mortgage expenses in response to the approaching peak of the bank rate. This suggests that although market sentiment may remain restrained, I hold the belief that the second half of this year will witness an improvement.”