Annual house prices suffer worst fall since July 2009
Annual house prices suffered their worst fall last month since July 2009, according to figures released on Tuesday by Nationwide.
Prices were down 3.8% on the year following a 3.5% decline in June and now stand at £260,828.
On the month, prices fell 0.2% in July following a 0.1% increase a month earlier.
Nationwide chief economist Robert Gardner noted that the price of a typical home is now 4.5% below the August 2022 peak.
"Investors’ views about the likely path of UK interest rates have been volatile in recent months, with the projected Bank Rate peak fluctuating between 5% in mid-May and 6.5% in early July," he said. "There has been a slight tempering of expectations in recent weeks but longer-term interest rates, which underpin mortgage pricing, remain elevated."
He said that as a result, housing affordability remains stretched for people looking to buy a home with a mortgage.
"For example, a prospective buyer, earning the average wage and looking to buy the typical first-time buyer property with a 20% deposit, would see monthly mortgage payments account for 43% of their take home pay (assuming a 6% mortgage rate)," he said.
"This is up from 32% a year ago and well above the long-run average of 29%. Moreover, deposit requirements continue to present a high hurdle - with a 10% deposit equivalent to 55% of gross annual average income."