House prices fall 5.3% year-on-year in August

House prices fall 5.3% year-on-year in August

8:32 AM, 1st September 2023, About 9 months ago 3

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The Nationwide House Price Index for August indicates a monthly fall in prices of 0.8% feeding through cumulatively to an annual drop of 5.3%.

The average price of a property (not seasonally adjusted) now stands at £259,153 down £14,600 from the last August peak in 2022.

Market activity in the first 6 months of 2023 has seen a 20% drop in completed transactions against 2019 levels and a full 40% drop against the same period in 2021. Cash transactions have unsurprisingly been the most resilient against mortgaged completions due to the cost of borrowing.

A relatively soft landing is still achievable

Nationwide’s Chief Economist, Robert Gardner, said: “August saw a further softening in the annual rate of house price growth to -5.3%, from -3.8% in July, the weakest rate since July 2009. Prices fell by 0.8% over the month, after taking account of seasonal effects.

“The softening is not surprising, given the extent of the rise in borrowing costs in recent months, which has resulted in activity in the housing market running well below pre-pandemic levels. For example, mortgage approvals have been around 20% below the 2019 average in recent months and mortgage application data suggests the weakness has been maintained more recently (we explore the evolving composition of transactions in more detail below).

“Nevertheless, a relatively soft landing is still achievable, providing broader economic conditions evolve in line with our (and most other forecasters’) expectations.

“In particular, unemployment is expected to remain low (below 5%) and the vast majority of existing borrowers should be able to weather the impact of higher borrowing costs, given the high proportion on fixed rates, and where affordability testing should ensure that those needing to refinance can afford the higher payments.

“While activity is likely to remain subdued in the near term, healthy rates of nominal income growth, together with modestly lower house prices, should help to improve housing affordability over time, especially if mortgage rates moderate once Bank Rate peaks.”


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Paul Robinson

19:51 PM, 1st September 2023, About 9 months ago

Year on year prices seem to go up its supply and demand their is so little to rent people have to buy that is whot fuels the year on year price rises


23:01 PM, 1st September 2023, About 9 months ago

A fall of 0.8% in August which is usually a less busy month for house sales due to holidays.

However, a fall of 0.8% coupled with far fewer house sales than normal indicates that a 10%+ fall over the year could be expected by February/March 2024.


16:53 PM, 2nd September 2023, About 9 months ago

Reply to the comment left by Paul Robinson at 01/09/2023 - 19:51
Depends on what you define as supply and demand.

Supply of rental properties has been dropping in contrast to demand over the past year.

Supply of housing stock is pretty low and constant and depends on housebuilding.

Supply of houses for sale has gone through the roof in my area. 16,000 within 40 miles of my location March 2022, now 46,000 and climbing. Was climbing by around 100 properties a day last month, the last couple of weeks it has jumped to around 300 properties per day. Thats net, i.e. after you account for propertie staken of the market.

Can only assume either mortgage rates or fear is driving it.

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