Britain’s largest mortgage lender, Halifax, has disclosed that UK house prices experienced their sharpest annual decline in 14 years in September.
This downturn can be attributed to the high mortgage costs that have led to a sixth consecutive monthly drop in sellers reducing their asking prices.
Consequently, recent research conducted by Cornerstone Tax, the UK’s leading property tax experts, reveals that 11% of Brits are planning on buying a house in the next six months to take advantage of falling prices, though further research shows that a record number of purchases are only made possible with support from the Bank of Mum and Dad.
In light of this, David Hannah, Group Chairman of Cornerstone Tax, discusses the ongoing decline in house prices and discusses whether there may be a glimmer of optimism on the horizon for those stuck in the rental market.
In September, the average price of a typical UK home declined by 0.4% month-on -month, marking the sixth consecutive monthly decrease. The average property price now stands at £278,601, down from £292,197 in the same month last year.
This decline in house prices coincided with the Bank of England’s decision to maintain interest rates, marking the first time in nearly two years that rates remained unchanged. Consequently, lenders have begun to lower rates on mortgage deals, creating more fertile conditions for those looking to enter the market.
While the market has continued to cool, Hannah states that it is not all doom and gloom and insists that the market continues to show signs of resilience and activity, notably from cash buyers who are alreadytaking advantage of the fall in house prices.
This also comes at a time when the Bank of England has paused rising interest rates, which Hannah predicts will be a huge boost for consumers to start spending ahead of the holidays, bolstering Britain’s economy and trickling down to create a much-needed boost for the property market.
David Hannah, Group Chairman at Cornerstone Tax, said, “The relentless surge in interest rates by the Bank of England recently severely compromised the affordability of mortgages and affected buyers’ spending capacity.
” Yet, in the midst of this challenging landscape, today’s report from Halifax may provide those stuck in the rental market with a glimmer of hope.
The Bank of England’s announcement that we may have reached the zenith of interest rates, alongside the biggest fall in house prices seen in 14 years, may suggest that affordability issues could subside towards the end of the year and early 2024.
“So, while the road ahead may seem uncertain, it’s important to remember that even in the face of a challenging market, the property market can adapt and rebound, offering opportunities for those who remain vigilant and strategic.”
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