UK house prices have experienced their first year-on-year fall in almost three years, with a 0.4% drop in August compared to the previous year, according to lender Lloyds. The average property price stood at £298,468 last month, representing a 0.2% decrease from July.
This decline, the first since November 2023, comes as prospective buyers face higher mortgage rates, geopolitical uncertainty, and affordability challenges. Andrew Asaam, a director at Lloyds, described the housing market as "subdued" due to increased inflation, borrowing costs, and geopolitical tensions.
Mortgage approvals have reached their lowest level since early 2024. The average rate for a two-year fixed residential mortgage was 5.6% on Friday, with the average five-year deal at 5.66%, both higher than at the start of the year.
Regionally, Northern Ireland saw the strongest growth, with prices rising 6.9% year-on-year to an average of £231,245. In contrast, the south-east of England recorded the largest decline, with prices falling 1.6% to an average of £381,729, and Greater London saw a 1.5% drop.