House prices fall by the most in south east, says Halifax

The value of a home in south east England has dropped by £15,500 over a year after the region recorded the sharpest fall in house prices in July.

Halifax, the High Street lender, said average house prices in the area, which includes Hampshire, dropped by 3.9%.

House prices in Wales, once the beneficiary of the pandemic "boom", also tumbled.

Overall, however, Halifax said the UK's housing market was showing resilience, despite higher mortgage costs.

It said average prices fell by 2.4% in the year to July, valuing a typical home at £285,044. That is slower than the 2.6% decline recorded in the year to June.

Some regions saw sharper falls than others.

The value of a home in south east England dropped to £382,489 in July.

Wales, which Halifax said had seen "some of the most rapid growth in house prices witnessed during the pandemic 'boom'", recorded one of the largest annual falls at 3.3% to £214,495.

Greater London also saw prices drop by 3.5% in July, but the average price is much higher at £531,141 compared to other regions.

Commenting on the housing market in the UK, Kim Kinnaird, director at Halifax Mortgage, said it "continues to display a degree of resilience in the face of tough economic headwinds".

She said: "In particular, we're seeing activity among first-time buyers hold up relatively well, with indications some are now searching for smaller homes, to offset higher borrowing costs."

Last week, the Bank of England raised interest rates for the 14th time in a row. The increase from 5% to 5.25% will lift the cost of borrowing money for many mortgages.

Andrew Bailey, the Bank's governor, told the BBC there was an "adjustment" to house prices going on. But he cautioned: "I think we should avoid preaching crisis at this point, it's not that."

Last week, the Nationwide building society said that house prices in July recorded their sharpest fall in 2009 but they remained £45,000 higher than February 2020, the last month before the first lockdown.

During the height of the Covid pandemic, house prices soared as people who were forced to work from home at the time decided they wanted more space inside and out.