- Prior +1.8%; revised to +1.4%
- House prices +11.8% y/y
- Prior +12.9%; revised to +12.5%
This is quite a significant development as UK house prices are seen dropping on a monthly basis for the first time in over a year. The last time house prices dropped during the month was back in June 2021. That said, the decline last month was marginal with average house prices falling to £293,221, down £365 from the previous month’s record high. Halifax notes that:
“While we shouldn't read too much into any single month, especially as the fall is only fractional, a slowdown in annual house price growth has been expected for some time. Leading indicators of the housing market have recently shown a softening of activity, while rising borrowing costs are adding to the squeeze on household budgets against a backdrop of exceptionally high house price-to-income ratios.
“That said, some of the drivers of the buoyant market we’ve seen over recent years – such as extra funds saved during the pandemic, fundamental changes in how people use their homes, and investment demand, still remain evident. The extremely short supply of homes for sale is also a significant long-term challenge but serves to underpin high property prices.
“Looking ahead, house prices are likely to come under more pressure as those market tailwinds fade further and the headwinds of rising interest rates and increased living costs take a firmer hold. Therefore a slowing of annual house price inflation still seems the most likely scenario.”