The average UK house price has fallen for the fourth month in a row, according to Halifax, which says higher borrowing costs are increasingly pushing first-time buyers to switch to smaller homes.
The average UK house price fell by 0.3% in July, its monthly index showed, with the typical UK home costing £285,044, compared with a peak of £293,992 last August.
Despite the fall in prices, Halifax said the housing market was showing resilience in the face of “tough economic headwinds”.
Kim Kinnaird, director at Halifax Mortgages, said: “In particular, we’re seeing activity among first-time buyers hold up relatively well, with indications some are now searching for smaller homes, to offset higher borrowing costs.”
The lender added that the buy-to-let sector was under pressure as the combination of increased interest rates and new rental market reforms put the squeeze on landlords’ business models.
Southern England and Wales are experiencing the most downward pressure on property prices, with the exception being the West Midlands, where prices stayed flat.
Kinnaird said house prices were likely to continue falling into next year. “Based on our current economic assumptions, we anticipate that being a gradual rather than a precipitous decline.”
Kinnaird added that average house prices were still £45,000, or 19%, above pre-Covid levels.
