House prices fall at sharpest rate in 14 YEARS – what it means for you

HOUSE prices fell at their sharpest rate in 14 years last month — with the average value now £259,153, figures show.

The 5.3 per cent annual drop was the biggest since July 2009 and left house prices £14,600 below their August 2022 peak.

The year-on-year figure in July was down 3.8 per cent, Nationwide Building Society said.

 Home-mover completions with a mortgage in the first half of this year were a third down on 2019, while first-time buyer numbers were around 25 per cent lower.

Buy-to-let purchases involving a mortgage were nearly 30 per cent down, yet cash purchases were up by two per cent.

Nationwide said the figures were not surprising given the recent rise in borrowing costs forced by Bank of England base rate hikes.

Its chief economist, Robert Gardner, said mortgage approvals of late were a fifth below the average for 2019.

He said most existing borrowers should be able to “weather” higher borrowing as a high proportion were on fixed mortgage rates.

And he thinks higher wages should improve affordability — adding that there were signs buyers were looking towards smaller, less expensive properties.

Chris Druce, of estate agent Knight Frank, said “buyer confidence” would improve when the base rate stops rising.

He claimed the “shock-absorber effect” of strong wage growth, lockdown savings and longer mortgage terms should help keep demand resilient.

Independent financial adviser David Stirling said many borrowers were extending mortgages to cut costs — and he welcomed HSBC’s new 40-year mortgage.

Christian Duncan, from the Manchester Mortgage Centre, said first-time buyers were looking to rein in spending to “find a property that is in line with their budget”.