Halifax House Price Index August 2023

UK house prices fell 4.6% YoY in August, according to mortgage lender Halifax.
House prices in the south of England and Wales are under the most pressure.
Average UK property now costs £279,569, down by around £14,000 over the last year

Annual rate of growth falls to -4.6%

Source: Halifax, IHS Markit

Key trends

Average UK house prices dropped in August, falling 1.9% MoM, the steepest decline since November 2022.
The annual rate of house price growth was -4.6%, the biggest year-on-year decrease since 2009, although the figure is driven up by record-high prices in the summer of 2022.
Prices fell on an annual basis in all regions of the UK, with northern regions emerging generally emerging more resilient than those in the south.
The South East is facing the most downward pressure, with house prices having fallen by 5.0% on an annual basis to an average of £379,565.
On the other hand, prices in Scotland fell by just 0.6% YoY, the slowest pace of decline the country.

Outlook

The latest house price growth figures reflect the impact of rising mortgage rates because of interest rate increases, according to Halifax.
Households looking to move are increasingly holding off from doing so while they wait for more clarity on the trajectory of interest rates.
Prices have nonetheless remained more resilient than expected and are in line with Halifax forecasts for the year, with August’s decline in prices being driven down further by seasonal trends, with many households on holiday.
Looking ahead, rising mortgage rates will continue to drive down property prices in the months ahead, although it is important to note that prices remain £40,000 (+17%) higher than pre-pandemic levels.
Coupled with strong income growth, this creates more favourable market conditions for first-time buyers, whose house price to income ratio is at the most affordable level since June 2020.