The average house price in the UK fell by 0.1 per cent in June, the consecutive month of decline and the largest such fall since June 2011., according to Halifax.
Property values fell by 2.6 per cent annually across the UK, equating to around £7,500 being wiped off the average UK house price in cash terms.
The average house price in June was £285,932 ($365,382), Halifax said.
Halifax said the drop in house prices was largest in the south east of England.
Kim Kinnaird, director of Halifax Mortgages, said the large annual drop largely reflected the comparison from a peak in house prices seen about a year ago, with relatively little movement in prices over the past few months.
But soaring mortgage costs – spurred by rising expectations for Bank of England interest rates as it battles inflation – pointed to weaker months ahead, she said.
"How deep or persistent the downturn in house prices will be remains hard to predict," Ms Kinnaird said, adding that falling inflation could offer some support.
"With markets now forecasting a peak in Bank Rate of over 6 per cent, the likelihood is that mortgage rates will remain higher for longer, and the squeeze on household finances will continue to put downward pressure on house prices over the coming year."
Alice Haine, personal finance analyst at DIY investment platform Bestinvest, said the property market had succumbed to the heavy blow dealt by surging borrowing costs.
"A steeper annual decline hinted at the challenges ahead as affordability gets squeezed by rapidly rising mortgage rates and more sellers are forced to slash the asking price on their homes to secure a sale," she said.
Financial markets expect interest rates to peak as high as 6.5 per cent by next spring, with both two and five-year fixed rates now averaging above the 6 per cent mark.
Some of the UK's biggest mortgage lenders have held meetings with Chancellor Jeremy Hunt to discuss what can be done to help struggling homeowners.
Ms Haine said: "House-price falls have been relatively muted so far, with the property market proving resilient despite 13 interest rate rises since December 2021 as the Bank of England battles to tame high inflation. With the central bank now under fire for failing to act fast enough to tackle the inflation threat, the ensuing mortgage crisis is likely to change that scenario in the coming months as house price growth faces a significant drag from higher interest rates."
Mark Manning, MD of Northern Estate Agencies Group, which has branches across Yorkshire, Lancashire and North Derbyshire said: “One of the big trends we observed In June was the growth in the number of properties coming to market… it seems clear that some sellers are seeing a greater choice of properties to buy which contributes to their decision to move.”
Jeremy Leaf, a north London estate agent, said: “On the ground, sales are still proceeding often to those who are not dependent on mortgage finance but they are taking longer and often involve protracted renegotiations, resulting in modest, rather than large, price falls.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “There is growing appetite from borrowers for shorter-term fixes and penalty-free trackers in the hope that this volatility in the market will be relatively short-lived.”
The specs
Engine: 3.0-litre 6-cyl turbo
Power: 374hp at 5,500-6,500rpm
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Transmission: 8-speed auto
Fuel consumption: 8.5L/100km
Price: from Dh285,000
On sale: from January 2022
Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
Available: Now
How much do leading UAE’s UK curriculum schools charge for Year 6?
- Nord Anglia International School (Dubai) – Dh85,032
- Kings School Al Barsha (Dubai) – Dh71,905
- Brighton College Abu Dhabi - Dh68,560
- Jumeirah English Speaking School (Dubai) – Dh59,728
- Gems Wellington International School – Dubai Branch – Dh58,488
- The British School Al Khubairat (Abu Dhabi) - Dh54,170
- Dubai English Speaking School – Dh51,269
*Annual tuition fees covering the 2024/2025 academic year
UAE currency: the story behind the money in your pockets
The specs
Engine: 2.0-litre 4-cylinder turbo
Power: 240hp at 5,500rpm
Torque: 390Nm at 3,000rpm
Transmission: eight-speed auto
Price: from Dh122,745
On sale: now
UAE v Gibraltar
What: International friendly
When: 7pm kick off
Where: Rugby Park, Dubai Sports City
Admission: Free
Online: The match will be broadcast live on Dubai Exiles’ Facebook page
UAE squad: Lucas Waddington (Dubai Exiles), Gio Fourie (Exiles), Craig Nutt (Abu Dhabi Harlequins), Phil Brady (Harlequins), Daniel Perry (Dubai Hurricanes), Esekaia Dranibota (Harlequins), Matt Mills (Exiles), Jaen Botes (Exiles), Kristian Stinson (Exiles), Murray Reason (Abu Dhabi Saracens), Dave Knight (Hurricanes), Ross Samson (Jebel Ali Dragons), DuRandt Gerber (Exiles), Saki Naisau (Dragons), Andrew Powell (Hurricanes), Emosi Vacanau (Harlequins), Niko Volavola (Dragons), Matt Richards (Dragons), Luke Stevenson (Harlequins), Josh Ives (Dubai Sports City Eagles), Sean Stevens (Saracens), Thinus Steyn (Exiles)
Results
6.30pm: Madjani Stakes Group 2 (PA) Dh97,500 (Dirt) 1,900m, Winner: RB Frynchh Dude, Pat Cosgrave (jockey), Helal Al Alawi (trainer)
7.05pm: Maiden (TB) Dh82,500 (D) 1,400m, Winner: Mnasek, Dane O’Neill, Doug Watson.
7.40pm: Maiden (TB) Dh82,500 (D) 1,600m, Winner: Grand Dubai, Sandro Paiva, Ali Rashid Al Raihe.
8.15pm: Handicap (TB) Dh87,500 (D) 2,200m, Winner: Meqdam, Sam Hitchcock, Doug Watson.
8.50pm: Dubai Creek Mile Listed (TB) Dh132,500 (D) 1,600m, Winner: Thegreatcollection, Pat Cosgrave, Doug Watson.
9.25pm: Conditions (TB) Dh120,000 (D) 1,900m, Winner: Sanad Libya, Richard Mullen, Satish Seemar.
10pm: Handicap (TB) Dh92,500 (D) 1,400m, Winner: Madkhal, Adrie de Vries, Fawzi Nass.
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
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F1 The Movie
Starring: Brad Pitt, Damson Idris, Kerry Condon, Javier Bardem
Director: Joseph Kosinski
Rating: 4/5
BMW M5 specs
Engine: 4.4-litre twin-turbo V-8 petrol enging with additional electric motor
Power: 727hp
Torque: 1,000Nm
Transmission: 8-speed auto
Fuel consumption: 10.6L/100km
On sale: Now
Price: From Dh650,000
Day 1, Dubai Test: At a glance
Moment of the day Sadeera Samarawickrama set pulses racing with his strokeplay on his introduction to Test cricket. It reached a feverish peak when he stepped down the wicket and launched Yasir Shah, who many regard as the world’s leading spinner, back over his head for six. No matter that he was out soon after: it felt as though the future had arrived.
Stat of the day - 5 The last time Sri Lanka played a Test in Dubai – they won here in 2013 – they had four players in their XI who were known as wicketkeepers. This time they have gone one better. Each of Dinesh Chandimal, Kaushal Silva, Samarawickrama, Kusal Mendis, and Niroshan Dickwella – the nominated gloveman here – can keep wicket.
The verdict Sri Lanka want to make history by becoming the first team to beat Pakistan in a full Test series in the UAE. They could not have made a better start, first by winning the toss, then by scoring freely on an easy-paced pitch. The fact Yasir Shah found some turn on Day 1, too, will have interested their own spin bowlers.
