Unprecedented Decline in Property Prices amidst Annual Increase Comparable to Figures Previously Seen
The UK housing market, a subject of interest for many, is currently experiencing a shift in its dynamics. According to Halifax, the average house price in the country stands at £285,044. This figure represents a slight decrease from the peak average of £293,992, which was reached in August 2022.
Despite this decrease, the long-term cost of buying a home remains steep due to slowing inflation rates and the Bank of England's interest rate hikes, with a total of 14 hikes announced so far. However, there is hope that fixed mortgage rates may start to fall, as suggested by Nathan Emerson, chief executive of Propertymark, in light of recent positive inflation news.
The decrease in house prices has eased from -2.6% in June to -0.3% month on month, indicating a stabilising market. This stability is also reflected in the equity market, as house prices begin to steady, according to Emerson.
Southern England and Wales are experiencing the most downward pressure in property prices, as per Halifax Mortgages. Despite high fixed mortgage rates compared to recent standards, buyers are able to negotiate on price and come to a middle ground with sellers still able to make a healthy gain on the final sale price, according to Emerson.
Strong wage growth, running at around +7% annually, is providing support for the UK housing market, as stated by Kim Kinnaird, director of Halifax Mortgages. She adds that the prospects for the UK housing market are closely linked to the performance of the wider economy.
It's worth noting that the British bank that exceeded a record high average house price of £33,000 last year is not explicitly named in the provided search results. However, the average UK house price, according to the Office of National Statistics, reached a record high of £296,000 in October 2022, which was £33,000 higher than the year before.
The uptick in unemployment is expected to restrain wage growth somewhat, but it is unlikely to trigger a sharp deterioration in housing market conditions, as per Kinnaird. This suggests that the UK housing market, while experiencing some adjustments, remains resilient.
In conclusion, while the UK housing market is experiencing a slight downturn, factors such as strong wage growth and the potential for falling mortgage rates offer some optimism for the future. The market is expected to continue evolving in response to economic conditions and government policies.
