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Halifax Claims South-East England House Values Decline Most

House prices

After recording the largest monthly loss in housing prices in July, the southeast region of England has seen a drop in the cost of a home of £15,500 over the course of the past year.

The high-street lender Halifax said that typical prices for homes in the region, which covers the Home Counties, declined 3.9% over the past year.

The cost of homes in Wales, which had previously benefited from the epidemic “boom,” also fell significantly.

Despite the fact that mortgage rates are higher, Halifax found that the overall housing market in the UK was exhibiting signs of resilience.

It was reported that average prices had decreased by 2.4% within the year leading up to July, resulting in a typical home being valued at £285,044. That is a much more gradual decrease than the 2.6% that was recorded up until June.

Despite recent decreases, costs are still far higher than they were before the Covid epidemic.

The decline was more severe in some areas than in others. In July, the cost of a house in south-east England fell to £382,489 from the previous month’s level.

According to Halifax, Wales had some of the greatest rapid growth in home prices observed during the economic ‘boom.’ However, Wales recorded one of the steepest annual decreases, with prices dropping by 3.3% to a total of £214,495.

North East England

Even though prices fell by 3.5% in the Greater London area in July, the average cost is still far greater than it is in other locations, coming in at £531,141.

The national average price of a home dropped in almost all regions of the UK in the month of July, with the exception of the West Midlands, whereas prices were unaffected.

With an average price of just £167,594, real estate in England’s northeastern region continues to be the country’s most affordable market.

Kim Kinnaird, executive of Halifax Mortgages, which has been acquired by Lloyds Banking Company, was asked to comment on the property market in the United Kingdom and said that it continues to demonstrate a degree of resiliency in the face of challenging economic headwinds.

She went on to say that the activity amongst first-time buyers has been holding up rather well, and there are indications that some of them are starting to look for smaller houses in order to offset the increased borrowing prices.

The Central Bank of England increased the benchmark interest rate once again, bringing the total number of consecutive rate hikes to 14. The interest rate on many mortgages will become more expensive to borrow money for as a result of the hike from 5% to 5.25%.

According to financial information firm Moneyfacts, the average rate for a fixed-term mortgage with a two-year term dropped by one basis point to 6.84% on Monday, while the average contract for a five-year term remained the same at 6.35%.

A report from Laura Suter, who is the head of private finance at AJ Bell, there have been rumors that the current level of interest rates might represent the highest point for customers. This is despite the fact that building societies and banks have begun to reduce their mortgage interest rates.

The Governor of the Bank of England, Andrew Bailey, stated to the BBC that there is currently a “adjustment” taking place in the housing market. But he issued a word of caution, saying that we shouldn’t be preaching about a catastrophe at this stage because it’s not that.

The National building society reported last week that property prices in July experienced their greatest decrease in 2009, but that they maintained £45,000 more than in February 2020, which was the last month preceding the first lockdown. Despite this, home values in July saw the biggest fall in 2009.

Those who were compelled to work from the house at the peak of the Covid epidemic decided that they wanted more room inside and outside of their homes, which caused housing values to skyrocket at this time. A break from stamp duty was another factor that helped the market.

Ms. Kinnaird of Halifax said that even though home values will continue to drop into the following year, she anticipates that the decline will be moderate rather than dramatic.

And a single that is unlikely to totally reverse the housing price boom that has been witnessed over the past few years, with typical property prices still being approximately £45,000, or 19%, over where they were before the Covid was introduced, she noted.

According to Marc von Grundherr, head of Benham and Reeves real estate brokerage, it is truly very astonishing that the housing market continues to remain so strong given the larger economic picture. This is because the surge in property values that occurred throughout the epidemic is what makes this statement so astounding.

However, LSL Property Services, among the major providers of mortgages and valuation services in the United Kingdom, has issued a warning that its annual revenue will be “substantially less” than what was previously predicted. This is because rising interest rates have a negative impact on the activity of homebuyers.

As a result of the warning, the price of the company’s shares dropped by 13.8%.

According to LSL Property Solutions, which includes mortgage consultant Primis along with estate brokerage Your Move, the bigger-than-expected rise in the Reserve Bank of England rate of interest during June – when it jumped by an additional half points – had a major influence on the market for mortgages. This increase occurred when the base rate rose by 0.5 percentage points.

According to Nationwide, consumer costs had decreased by 3.8% during the year leading up to July. Halifax’s numbers imply that prices have reduced by 2.4%; nevertheless, these figures depict a slightly distinct picture from Halifax’s figures.

Because each lender based their data on the mortgage approvals they’ve granted themselves, the calculations they use may be different.

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