House prices have fallen by 0.4% month-on-month in July, which is the fourth consecutive monthly fall in prices reported in the Halifax House Price Index (HPI).

Despite the further fall in prices month-on-month, house prices only dropped by 2.4% on an annual basis in July, easing up from a decline of 2.6% in June.

House prices in Greater London and the South East saw the largest decline, falling by 3.5% and 3.9% year-on-year respectively. Wales also saw a decline of 3.3% year-on-year, following the pandemic ‘boom’.

However, the West Midlands was the only region in the UK not to see a decline, remaining at the same price between July 2022 and July 2023.

The typical UK home now costs £285,044, down from a peak of £293,992 in August 2022.

Director at Halifax Mortgages, Kim Kinnaird, said: “These figures add to the sense of a housing market which continues to display a degree of resilience in the face of tough economic headwinds.

“In particular, we’re seeing activity amongst first-time buyers hold up relatively well, with indications some are now searching for smaller homes, to offset higher borrowing costs. Conversely the buy-to-let sector appears to be under some pressure, though elevated interest rates are just one factor impacting landlords’ business models, together with considerations of future rental market reforms. It remains to be seen how many may choose to exit and what that could mean for the supply of properties available to buy.

“Prospects for the UK housing market remain closely linked to the performance of the wider economy. Several factors are providing support, notably strong wage growth, running at around +7% annually. And, while the uptick in unemployment is likely to restrain that somewhat, it seems unlikely to reach levels that would trigger a sharp deterioration in conditions.”

Senior personal finance analyst at interactive investor, Myron Jobson, added: “Falling house prices should be good news for buyers, especially those looking to get onto the property ladder for the first time, but they aren’t falling fast enough to alleviate the affordability pressures.

“Halifax and Nationwide aren’t singing from the same hymn sheet this month when it comes to house prices. Nationwide reported a fall in house prices at the fastest annual rate in 14 years, as higher interest rates hamper people’s ability to buy a property with a mortgage.

“The conflicting assessments is symptomatic of an uncertain market that continues to adjust to the new status quo of higher prices and higher mortgage rates. A collection of micro-markets remains at play. Estate agents have reported that a lack of supply in larger property have kept prices inflated, as the race for space theme continues to play out.

“For many, the decision to buy or not to buy hinges on where mortgage interest rates land. Inflation is still key to the direction of mortgage rates. Fixed mortgage rates dipped following the lower-than-expected fall in inflation in June before creeping higher ahead of the Bank of England’s latest interest rate hike. Inflation is expected to ease significantly in the coming months, led by a fall in energy costs - which could pull down mortgage rates in the process. Put simply, if inflation starts to move meaningfully lower, this takes the pressure off the Bank of England to continue raising interest rates, so mortgage rates could follow.”

Share Story: