UK house prices fall by up to 3.9% except for ONE region - what this means for first-time-buyers?

UK house prices have fallen by up to 3.9%, according to a recent index by Halifax. Almost £1,000 was wiped off the average UK house price except for one region which saw neither growth or decline.

The average property value fell by 0.3%, marking the fourth monthly decline in a row, Halifax said. The typical UK home cost £285,044 in July, down from a peak of £293,992 last August.

In June this year, the average UK property value was nearly £1,000 higher than in July, at £286,011.

Kim Kinnaird, director, Halifax Mortgages, said: “Average UK house prices edged down slightly in July, with the monthly fall of 0.3% equivalent to a drop of around £1,000 in cash terms. While this was the fourth consecutive monthly decrease, all have been smaller than (minus) 0.5%.

“In reality, prices are little changed over the last six months, with the typical property now costing £285,044, compared to £285,660 in February.”

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

Kinnaird notes there is still uncertainty around the future supply of properties as the ‘buy-to-let sector appears to be under some pressure’. “Prospects for the UK housing market remain closely linked to the performance of the wider economy,” she continues.

“Several factors are providing support, notably strong wage growth, running at around 7% annually. And, while the uptick in unemployment is likely to restrain that somewhat, it seems unlikely to reach levels that would trigger a sharp deterioration in conditions.”

The drop in average property value will be good news for first-time-buyers looking to get on the property ladder. Some property professionals have confirmed more first-time-buyers are being drawn to the market.

Nicky Stevenson, managing director at estate agent group Fine & Country, said: “Smaller homes in affordable locations close to major employment hotspots are the biggest draw at the moment, and these are also enticing first-time buyers to the market.”

Kirsty Wells, director of St Leonards-on-Sea-based Blueprint Mortgages, said: “In the past few months, I have had a big increase in inquiries from first-time buyers, who are proving particularly resilient given market conditions.

“They are in a much stronger position currently as so many people have their properties on the market but can’t sell so building a chain is very tricky, whereas if a first-time buyer can come along and save the day, then they can negotiate a better price. I have seen clients negotiating around 5% off average asking prices recently.”

UK average house prices and annual change - by area

• East Midlands, £238,876, minus 1.4%
• Eastern England, £333,474, minus 2.4%
• London, £531,141, minus 3.5%
• North East, £167,594, minus 1.4%
• North West, £223,962, minus 0.9%
• Northern Ireland, £185,322, minus 0.3%
• Scotland, £201,501, minus 0.7%
• South East, £382,489, minus 3.9%
• South West, £299,649, minus 3.3%
• Wales, £214,495, minus 3.3%
• West Midlands, £250,285, 0.0%
• Yorkshire and the Humber, £203,631, minus 0.5%