UK House Prices Fall Further To Signal Resilience Amid Tough Economic Conditions

House prices in the United Kingdom fell for the fourth straight month in July, though slightly, and the housing market continued to display a degree of resilience in the face of tough economic headwinds, survey data from the Lloyds Bank subsidiary Halifax and S&P Global showed on Monday.

The house price index dropped 0.3 percent month-on-month in July, following a 0.1 percent fall in the prior month.

On an annual basis, the decline in house prices was 2.4 percent in July versus a 2.6 percent fall in June, marking the third successive monthly decrease.

The average property price was GBP 285,044 in July compared to GBP 285,660 in June, indicating only a small decline.

“Prospects for the UK housing market remain closely linked to the performance of the wider economy,” Kim Kinnaird, director at Halifax Mortgages, said.

“Several factors are providing support, notably strong wage growth, running at around +7 percent annually.”

Kinnaird also observed that the uptick in unemployment is likely to somewhat restrain that and seems unlikely to reach levels that would trigger a sharp deterioration in conditions.

Recent official data showed that consumer price inflation in the UK eased to a 15-month low of 7.9 percent in July versus 8.7 percent in June.

At its August meeting, the Bank of England hiked its key interest rate for the 14th time in a row by a quarter-point to 5.25 percent .

A better-than-expected inflation report for June moderated expectations of further base rate increases from the Bank of England.

Among regions, average house prices fell on an annual basis in almost all parts of the UK in July, except the West Midlands.

The South East experienced the greatest annual decline of 3.9 percent in July. London house prices dropped 3.5 percent to GBP 531,141.

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