The results show housing prices have fallen to their lowest point since 2009

UK house prices in July record biggest drop since 2009

The Nationwide HPI has revealed UK house prices have taken their biggest hit since 2009.

The figures revealed an annual change of -3.8% in July 2023, with average non-seasonally adjusted house prices falling to £260,828.

The decline is a 30 bps drop from June 2023 which saw prices fall by 3.5%.

According to Robert Gardner, chief economist at Nationwide, this was the weakest outturn since July 2009 but it is only modestly lower than the decrease recorded last month, with the price of a typical home now 4.5% below the August 2022 peak.

“While activity is likely to remain subdued in the near term, healthy rates of nominal income growth, together with modestly lower house prices, should help to improve housing affordability over time, especially if mortgage rates moderate once bank rate peaks," Robert continued.

Specialist finance industry professionals gave mixed views on the latest figures:

Jonathan Samuels, CEO at Octane Capital, said: “The current market outlook isn’t quite as turbulent as today’s house price figures may suggest and, in fact, we’ve seen a boost to market sentiment in the form of mortgage approval activity outperforming wider expectations.

“While this increase in buyer appetites will take some time to filter through to top line house price growth, it’s certainly an early sign that the worst is behind us.”

Tomer Aboody, director at MT Finance, also commented: “The declining number of transactions, combined with negativity in the market, is pushing down property prices, a trend which has been evident for several months.

“The constant interest rate increases are making affordability difficult for buyers, as they try to make moves, with many waiting until some stability comes in.

“With some better news on inflation recently, it will be interesting to see whether the Bank of England (BoE) postpones the next rate rise or goes for a slight increase, giving the market some breathing space to adjust.”

Mark Harris, CEO at SPF Private Clients, added: “Until we see a consistent decline in mortgage pricing, buyers relying on mortgages are likely to be more price sensitive in coming months on the back of affordability concerns.

“With another 25bps interest rate rise expected from the BoE later this week, we are not out of the woods just yet when it comes to rising mortgage costs.

“[Some] lenders including HSBC, Barclays and Nationwide have reduced their fixed-rate mortgage pricing on the back of better-than-expected inflation news.

“This has led to a calming of swap rates which underpin the pricing of fixed-rate mortgages, after weeks of considerable volatility.”


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