The Halifax House Price Index have released figures this week that show that in July 2022, house prices fell by 0.1%, the first reduction in house prices that they have seen in 13 months since last June. This drop in house prices, although not enormous, is quite a monumental event as prices have been steadily increasing month on month and home buyers, mortgage professionals, and estate agents alike have been sitting with baited breath, waiting to see if and when properties would go down again.
Hyper inflated property prices have become commonplace in recent years, especially in areas of London, which have always been above average. The average price of a house in England is now £275,000 compared to ten years ago in 2012 when the average price was £166,000! In London the average house price is a staggering £530,000 compared to ten years ago when it was still £300,000.
In the last year alone the UK has seen an average price increase of £28,000 however these figures released by Halifax indicate that the price of purchasing a property may finally be going down meaning that thousands of buyers will be able to get a better deal when purchasing a new property and thousands of sellers could be losing out on some profit compared to if they sold a few months ago.
This slight decrease in house prices comes after the Bank of England announced that they would be increasing the base rate to 1.75% and most experts believe that the UK will be entering into a recession soon, although nothing official has been announced. Despite the demand for properties still being high, the increase in rates and looming recession will no doubt have an affect on the value of properties as inflation tightens purse strings.
The next thing to do now is to sit and wait to see if this trend continues so that we can get a firm understanding of the way that the property values are moving.
Oportfolio mortgages based in South west London had this to say:
“We, like hundreds of other mortgage brokerages across the country, have been watching and waiting patiently to see when house prices will fall. Although it is not a huge drop, we think that this is something that will continue. To some, this is bad news but we are here to say that this is potentially a positive thing. Property prices have been over inflated for a few years now and buyers are being priced out, making it more difficult for people to buy houses and for people to sell their house! Now that properties are potentially going back down to a more reasonable and realistic value, and property demand is still high, we think this will be a great time for home buyers and house sellers and we are here and happy to help with any of their mortgage needs.”
If you or anyone you know is interested in purchase a new house or has any questions about property value decreases, please feel free to give our team a call to see how we can help.