House prices fell 1.3% to £369,127 from a year ago across England and Wales in August, the first time home prices have fallen into negative territory for more than 11 years, data from e.surv shows.
This fall of £4,800 is the first time annual home prices have turned negative since March 2012, “when the housing market was recovering from the banking credit crisis of 2007/2010,” reports the e.surv Acadata House Price Index.
It cites the traditionally quieter homemoving period in August, compounded by the cost-of-living crisis and higher mortgage costs, as the reason for the downturn.
It adds that this negative rate follows almost twelve months of consecutive falls in annual prices since they hit a peak of 12.7% in August 2022.
“The market was at that time experiencing buoyant demand following the pandemic, and with the support of low interest rates,” the study points out.
Over the month to August, prices fell 0.2%, or £755.
The report adds that preliminary data shows over the year to the end of July has only seen an average of 39,700 sales per month – the lowest level of transactions over this period for 17 years. Although full data over this period is still emerging from the Land Registry.
The survey points out that consumer confidence has edged up slightly in recent weeks and wages are rising, and though arrears and repossessions have risen, they still remain very low.
Acadata Senior Analysts John Tindale and Peter Williams say: “How the balance of all these factors then expresses itself through prices and activity is what we will track over coming months.”
