According to Halifax, the UK’s largest mortgage lender, there has been a 1% fall in house prices compared to a year ago. This is the first fall for over 10 years.
This translates to an average £3,000 drop in typical house prices year on year, and a £7,500 reduction from the August 2022 peak.
Nationwide has confirmed a deeper fall, with a 3.4% reduction in house prices.
Why have house prices fallen?
Halifax says higher borrowing costs, following the recent base rate rises, were affecting confidence in the housing market, with both buyers and sellers adjusting their expectations.
Mortgage rates have risen in recent weeks, with a number of fixed rate products withdrawn at short notice over the weekend.
Will prices continue to fall?
Time will tell whether this is just a price adjustment or if rising interest rates and the cost of living will continue to be felt by those trying to get on the housing ladder. But investors and developers will also need to adjust their expectations as profit margins could be squeezed.
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