House prices post biggest annual drop in 14 years
- In July, house prices fell 0.2% MoM
- They have fallen 3.8% in the year to July, increase in the fall of 3.5% in the year to June
Home prices fell 3.8 percent in the year through July, according to the latest Nationwide Home Price Index.
Median house price is now £260,828, up from £262,239 last year.
This is the steepest drop on record since July 2009, according to Nationwide, and is up from the 3.5 percent annual drop posted last month.
Home prices fell 3.8% annually in July, according to the latest Nationwide Home Price Index.
The variation in July occurs after a slight fall of 0.2% in the month, after taking seasonal effects into account.
As a result, the price of a typical home is now 4.5 percent below its August 2022 peak.
Robert Gardner, Nationwide’s chief economist, believes the continued decline in home prices is primarily due to higher mortgage interest rates.
He says: ‘Housing affordability remains in short supply for those looking to buy a home with a mortgage.
‘For example, a prospective buyer, earning the median salary and looking to purchase the typical first-time buyer property with a 20 percent down payment, would see monthly mortgage payments as 43 percent of his or her take-home pay, assuming 6 percent. cent mortgage rate.
“This is an increase from 32 percent a year ago and well above the long-term average of 29 percent.”
Median house price is now £260,828, down from £262,239 last year.
Adds Gardner: ‘In addition, deposit requirements continue to present a major hurdle, with a 10 per cent deposit equaling 55 per cent of average annual gross income.
‘This challenging affordability outlook helps explain why housing market activity has moderated in recent months.
‘There were 86,000 home transactions completed in June, 15 percent below levels prevailing in the same period last year and about 10 percent below pre-pandemic levels. Also, activity is still around 20 percent below 2019 levels.”
