LONDON (dpa-AFX) - UK house price inflation eased slightly in July after accelerating sharply in the previous month, and prices fell on a monthly basis for the first time since June last year, as rising interest rates and high cost of living hurt activity.
The house price index climbed 11.8 percent year-over-year in July, slower than the 12.5 percent rise in June, survey data from the Llyods Bank subsidiary Halifax showed on Friday.
On a monthly basis, house prices dropped 0.1 percent in July, reversing a 1.4 percent significant increase in June. Further, this was the first monthly decline since June 2021. Economists had forecast a 1.2 percent gain.
The average property price stood at GBP 293,223 in July, which was GBP 365 lower than the previous month's record high.
Among regions, Wales logged the highest annual inflation of 14.7 percent in June. This was closely followed by the South West of England by 14.3 percent.
Meanwhile, London continued to record slower annual house price inflation than the other UK regions. The latest inflation was 7.9 percent, which was the highest in almost five years.
'Leading indicators of the housing market have recently shown a softening of activity, while rising borrowing costs are adding to the squeeze on household budgets against a backdrop of exceptionally high house price-to-income ratios' Halifax Managing Director Russell Galley said.
'The extremely short supply of homes for sale is also a significant long-term challenge but serves to underpin high property prices,' Galley said.
Looking ahead, Galley said house prices will likely come under more pressure as market tailwinds fade further and rising interest rates and rising living costs take hold. Thus, a slowdown in house price inflation seems most likely, he added.
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