House prices in Britain dropped by 4.7% year-on-year in September due to the impact of high mortgage rates, the lender Halifax reported on Friday in its latest monthly update.
The decline represents an acceleration on the previous month’s 4.5% drop, and was the biggest annual fall in more than 14 years, data showed. The drop meant the average cost of a house in the UK is £14,000 ($17,100) lower than the peak seen in August last year.
According to the report, the price for an average UK home has now plunged to levels seen in early 2022, at around $340,000.
“Activity levels continue to look subdued compared to recent years, with industry data showing lower levels of new instructions to sell homes and agreed sales,” Kim Kinnaird, director of Halifax Mortgages, stated.
According to Kinnaird, borrowing costs are the primary factor, given the impact of higher interest rates on mortgage affordability.
“Against this backdrop, homeowners inevitably become more realistic about their target selling price, reflecting what has increasingly become a buyer’s market,” she added.
The housing market in Britain has been under pressure as soaring borrowing costs put off buyers. Real estate firm Zoopla projected this month that home sales in the UK are on course to fall to the lowest level in more than a decade as a result of surging mortgage costs.
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