Slight monthly fall in property prices, but the housing market displays resilience.
It’s time to take a look at the Halifax House Price Index for July 2023, which was published today.
The data shows that the average UK house price fell slightly in July (-0.3%), equivalent to a drop of around £1,000 in cash terms. While this was the fourth consecutive monthly decrease, all have been smaller than -0.5%.
According to the index, the typical property now costs £285,044, compared to £285,660 in February. The pace of annual decline also slowed to -2.4% in July, against -2.6% in June.
Activity amongst first-time buyers held up relatively well, with indications some are now searching for smaller homes, to offset higher borrowing costs. In contrast, the buy-to-let sector appears to be under pressure with elevated interest rates and considerations for future rental market reforms.
Furthermore, Southern England and Wales experienced the most downward pressure on property prices. In the South East of England, house prices were down -3.9% annually, and Wales experienced a -3.3% reduction on an annual basis.
Prospects for the UK housing market remain closely linked to the performance of the wider economy. The continued affordability squeeze will mean constrained market activity persists, with house prices expected to fall into next year. Based on current economic assumptions, this is anticipated to be gradual rather than a steep decline.
These latest figures suggest the housing market continues to display a degree of resilience in the face of tough economic headwinds.
To summarise:
- Average house price fell by -0.3% in July, a fourth consecutive monthly decline
- House prices in July 2023 were 2.4% lower than the same month a year earlier
- Typical UK property now costs £285,044 (vs peak of £293,992 last August)
The next Halifax House Price Index is scheduled for release on Thursday 7th September 2023.
