Key facts
- UK house prices fell 0.4% year-on-year in August.
- This is the first annual decrease since November 2023.
- The average house price in the UK is £298,468.
- Prices in London dropped 1.5% and in the South East by 1.6%.
- Housing market activity is at its slowest in over two years.
- Mortgage approvals are at their lowest point since the start of 2024.
House prices in the UK have fallen for the first time in three years, with the average price decreasing by 0.4% year-on-year to £298,468 in August. This marks the first negative annual movement since November 2023, as high borrowing costs and economic uncertainty deter prospective buyers.
The property market slowdown is most pronounced in the South of England, where higher prices and associated costs like stamp duty have a greater impact. London saw a 1.5% drop in average prices to £534,177, while the South East experienced a 1.6% decrease to £381,729.
Property experts at Lloyds noted a clear divide in house price performance across the UK, with the current market conditions causing buyers to "sit tight" and sellers to be reluctant to lower their asking prices. Housing market activity is at its slowest in over two years, with mortgage approvals at their lowest level since the beginning of 2024.
Andrew Asaam, mortgages director at Lloyds, anticipates the housing market will remain subdued in the coming months, influenced by the upcoming October Budget and inflation figures. However, he believes significant further price drops are unlikely due to resilient employment and growing wages supporting demand from those needing to move.
Nathan Emerson, chief executive of Propertymark, expressed hope that the market will find a more stable footing as the year progresses, with the Autumn Budget and interest rate announcements being key factors for aspiring buyers and sellers.