UK House Prices Post First Annual Decline in Nearly Three Years
UK house prices fell 0.4% annually in August, the first drop since November 2023, as buyers held back amid higher borrowing costs.
British house prices recorded their first annual decline in almost three years during August, according to monthly data from Lloyds Banking Group. The lender reported a 0.4% year-on-year fall, a sharp reversal from the 0.2% rise economists had anticipated in a poll.
On a monthly basis, prices dipped 0.2% in August, also missing forecasts for a modest increase. The previous month's reading was revised down to show a 0.1% contraction, indicating a softening trend that began before the latest figures.
Lloyds attributed the slowdown to a more challenging economic environment. Higher borrowing costs, influenced by global events including the U.S.-Iran conflict, have created uncertainty that is prompting some potential buyers to delay purchases.
Andrew Asaam, mortgages director at Lloyds, noted that the market is not witnessing a wave of sellers slashing prices. Instead, many homeowners are choosing to wait, reluctant to accept offers they consider too low, while buyers hold off to see how conditions evolve.
The data, previously published under the Halifax brand, contrasts with figures from rival lender Nationwide Building Society. Nationwide reported 1.6% annual growth and a 0.2% monthly rise for August, highlighting divergent trends across the UK housing market.