1.7% drop in house prices in July

08 August 2008

Another blow is dealt to homeowners

The latest monthly report from the Halifax has illustrated that the downturn in property prices continued in July.

According to the lender, property prices fell by 1.7% in July, which means the annual rate of decline has increased from 6.1% to 8.8%.

This means the average property price has now dropped to £177,351, a value not seen since June 2006.

The decrease in prices was blamed on the drop in demand from home buyers as they had found themselves “significantly curbed” by the inability to get mortgage funds, high prices and the current increases in fuel and food putting strain on the household finances.

Suren Thiru, economist at Halifax, said: “Pressure on householders’ income, together with a very significant reduction in mortgage finance due to the global financial markets crisis, is constraining potential house buyers’ ability to enter the market.

“This is resulting in both lower prices and activity levels,” he added.

In June this year, the Halifax predicted that property prices would decrease by around 9% over the course of the year.

However, the new figures suggest that in fact the level of reduction has already surpassed that figure because prices fell by 10% in the first seven months of the year.

Click the link to use our mortgage finder