Halifax report reveals first annual decline in house prices in over a decade
Cornerstone Tax discusses the Halifax HPI, which shows the first annual decline in house prices in over a decade.
According to Halifax, house prices in the UK have fallen by 1% compared to a year ago, marking the first decline of this kind since 2012. The mortgage lender reported that average house prices in May were £3,000 lower than the previous year, and £7,500 below their peak in August.
In light of this, David Hannah, Chairman of Cornerstone Group International – the UK’s leading property tax experts – discusses the current state of the property market.
Halifax states that the average cost of a UK home is now £286,532. It noted a slight decrease in prices compared to the previous month, attributing the year-on-year fall to a robust market a year ago.
However, rival company Nationwide has reported a more significant decline in house prices, with property values down by 3.4% in the year leading up to May—the largest drop in 14 years.
Experts point to prolonged inflation as the main cause for this decline. Despite predictions of further price decreases, Hannah believes that the market will actually see growth towards the end of 2023.
While the ongoing fall in house prices may be good news for first-time buyers, there has been a reduction in the availability of affordable mortgages.
Data from Moneyfacts reveals that nearly 10% of mortgages have been withdrawn from the market due to concerns about rising interest rates.
Approximately 800 residential and buy-to-let deals have been affected, and average rates for two- and five-year fixed deals have also increased.
David Hannah, Chairman at Cornerstone Group International, discusses the effect of rising rates on the property market:
“The latest house price data from Halifax, highlighting that house prices have experienced its first annual decline since 2012, will be welcome news for homebuyers, and in particular, first-time buyers.
“However, there are still significant obstacles when looking to purchase a home.
“A rise in mortgage rates due to inflation figures being stronger than expected is unwelcome news for homeowners.
“However, I believe that the housing market has recently shown significant resilience, and I have a positive outlook for the remainder of the year.
“Prices are starting to stabilize, which will hopefully boost lender confidence.
“Of course, lenders will adjust rates according to interest rates, but if they see inflation moving in the right direction, that will be crucial.”
Kindly shared by Cornerstone Tax
Main article photo courtesy of Pixabay
