House prices: What was happening in the world the last time property values fell like they have now?

House prices in the UK dropped at their quickest annual rate for the first time in 14 years, according to data released by Nationwide. It has been revealed that prices dropped by 3.8% in July 2023 despite mortgage interest rates remaining high.

The average home in the UK costs £260,828 - around £13,000 less than houses cost last August when they peaked.

That represents the biggest decline since July 2009 and while many prospective first-time buyers may welcome the decline, others who already own properties may be concerned about dwindling value.

At the same time, in the midst of inflation and interest rates set by the Bank of England, mortgage costs have hit their highest level for around 15 years.

To put into perspective just how starkly different things are now, we take a look back at what was happening in the world 14 years ago in July 2009 to show just how long it has been since house prices have seen a drop like they did last month.

Michael Jackson's death

Only five days before July started, the world lost a music icon as Michael Jackson was found dead on June 25.

It seems like only yesterday the world was in a state of shock at the news that the King of Pop had died from acute propofol intoxication.

Serena Williams wins women's Wimbledon title

Back in July 2009, Serena Williams claimed what would be her third women's singles title at Wimbledon by beating her older sister Venus 7-6 6-2.

After this, Serena has gone on to win a further four singles titles at Wimbledon.

Harry Potter and the Half-Blood Prince is released

Later in the month on July 15, Harry Potter and the Half-Blood Prince was released in cinemas. The film was an adaptation of the sixth Harry Potter book by J K Rowling.

We're now so far removed from that time that two spin-off films have been released after the initial series was concluded

Roger Federer wins men's Wimbledon title

A day after Serena's victory, Tennis great Roger Federer defeated Andy Roddick 5-7, 7-6, 7-6, 3-6, 16-14 in an epic final

The win gave Federer his record 15th Grand Slam title. He went on to win two more championships at Wimbledon and retired from the sport last year.

The Statue of Liberty crown reopens after 8 years

Following security concerns after 9/11, the crown of the Statue of Liberty in New York was reopened on Independence Day, 2009, after eight years.

It meant tourists could once again take in views of New York Harbour after climbing 168 steps.

Chris Pratt and Anna Faris get married

Both are now remarried and living happier lives, but back in 2009 Chris Pratt and Anna Faris tied the knot on July 9.

A high-profile divorce followed in 2018 and while Pratt is now married to Katherine Schwarzenegger, Anna Faris is married to Michael Barrett.

It's clear that much has changed since we last saw house prices drop as they have done in July 2023, but some are still urging caution.

Housing still remains an issue as mortgage rates remain high and some earners on as much as £30,000 a year are being turned away from 'affordable rent schemes.'

Robert Gardner, Nationwide's Chief Economist, said: “Annual house price growth edged down to -3.8% in July. This was the weakest outturn since July 2009, although it is only modestly lower than the -3.5% recorded last month. There was a slight fall of 0.2% over the month, after taking into account of seasonal effects. As a result, 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. There has been a slight tempering of expectations in recent weeks but longer-term interest rates, which underpin mortgage pricing, remain elevated."

“As a result, housing affordability remains stretched for those 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).

"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."