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House prices drop from last month

House prices drop from last month

Category: Mortgages

Updated: 28/10/2014
First Published: 28/10/2014

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This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

It may have seemed as though house prices would spiral up forever, but today the Land Registry reported that house prices in England & Wales are beginning to fall, potentially indicating a cooling of the once smoking UK housing market.

According to the latest Land Registry House Price Index, house prices dropped by 0.2% in September – the biggest monthly fall for nearly a year. Annual price inflation also recorded a dip, with growth of 7.2% being recorded in September, down from the annual rate of 8.4% in August.

This means that the average house price in England & Wales now stands at £177,299, a far cry from the high of £181,324 that was seen in November 2007.

The high risers and the slow movers

The East showed the strongest monthly house price growth by reporting a month-on-month increase of 1.4% in September, giving it an average house price of £197,027. Meanwhile, Yorkshire & The Humber witnessed the most significant monthly fall, with a price drop of 2.2%.

Other regions to see a drop in month-on-month prices include the South East (-0.2%), the North East (-0.3%), the North West (-0.5%), East Midlands (-0.8%) and the West Midlands (-1.3%).

In terms of annual growth, London continued to surge ahead with year-on-year growth of a staggering 18.4%. However, on a monthly basis, the region actually saw a drop of 0.7%. Prices are still high, however, with the average house sold in London costing an eye-watering £460,521. Meanwhile, Yorkshire & The Humber mirrored its monthly performance by displaying the slowest pace of annual price growth, with prices rising by just 1.4% year-on-year.

Causes of the slowdown

These drops suggest that the housing market in England & Wales is beginning to slow down, with prices reflecting the cooling passions of both mortgage lenders and home buyers.

The implementation of stricter lending criteria, and the uncertainty of the timing and size of a base rate increase, could be contributing factors behind this more restrained attitude towards the housing market. Tighter regulation may make it harder for first-time buyers to get on the ladder and could make lenders more reluctant to fund these ambitions, while the fears about interest rate increases could deter buyers from making the leap or thinking about taking another step up the ladder.

What does this mean for you?

If you had put ambitions to buy a house on the back burner, now may be the time to spur yourself into action. Prices are currently on the decline, and fixed mortgage rates are also tumbling, so it could be the ideal time to get onto the property ladder. You can check out our top fixed rate mortgage deals by looking at our best buy tables.

But to fund your dream of homeowenership, a deposit is key. Putting aside even small amounts of cash could soon add up to give you the funds you need to buy that dream home. To make your money work as hard as possible, it's important to find the best savings vehicle for your cash. Check out our best savings deals to start your search for the best place to store away your hard-earned savings.

What next?

Check out our top fixed rate mortgage deals

Find the right savings account for you

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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