Home Property The average UK property is now worth £279,569, £14,000 less than a year ago

The average UK property is now worth £279,569, £14,000 less than a year ago

by LLP Finance Reporter
7th Sep 23 12:15 pm

New data from the Halifax House Price Index has revealed that the average cost of a property declined by 4.6% in the year up to August, marking the biggest fall in 14 years, with buyers contending with increasingly unaffordable mortgage costs.

In light of this news, David Hannah, Group Chairman of Cornerstone Tax – the UK’s leading property tax experts – discusses the consecutive fall in house prices and his predictions for the future of the market.

In August alone, prices fell by 1.9%, marking the fifth consecutive monthly decline, as the average home is now worth £279,569, down from £285,044 the previous month and approximately £14,000 lower than a year ago. Hannah points out that the consistent increase in interest rates by the Bank of England (BoE) has severely impacted Brits’ spending ability, coupled with high levels of interest for a 5-year mortgage. The current average five-year rate is now 6.19%, compared to 2.64% in December 2021.

While the market has continued to dampen, Hannah states that it is not all doom and gloom and insists that the market continues to show signs of resilience and activity, notably from cash buyers who are taking advantage of the fall in house prices. This also comes at a time when the Bank of England has stated that the UK has most likely reached the peak of interest rates, which Hannah predicts will lead the housing market to react strongly to positive news on borrowing costs.

David Hannah, Group Chairman at Cornerstone Tax said, “The relentless surge in interest rates orchestrated by the Bank of England, has pushed the average five-year mortgage rate to a staggering 6.19% compared to a mere 2.64% back in December 2021. It’s no wonder that the affordability of mortgages has been severely compromised, affecting buyers spending capacity.

“Yet, in the midst of this challenging landscape, there’s a glimmer of hope. Cash buyers are seizing the opportunities presented by falling prices, demonstrating the market’s resilience. What’s more, the Bank of England’s announcement that we may have reached the zenith of interest rates provides a ray of optimism. Positive news on borrowing costs could well breathe new life into the housing market.

“So, while the road ahead may seem uncertain, it’s important to remember that even in the face of adversity, the property market can adapt and rebound, offering opportunities for those who remain vigilant and strategic.”

Leave a Comment

You may also like