UK house prices drop again in July

Prices are now 2.6 per cent lower than one year ago with the cost of a typical home now £164,389

UK house prices fell for the fourth time in five months in July, as prices fell by 0.7 per cent.

"This can be only partly explained by unusually wet weather and the impact of an extra bank holiday during the quarter," said Robert Gardner, Nationwide's Chief Economist at the Nationwide commenting on the release of its latest house price figures.

“Against this difficult economic backdrop, it could be argued that UK house prices have shown resilience. While prices are currently 13 per cent below their 2007 peak, this is less than the declines seen in a number of other economies that have experienced similar or more robust economic recoveries."

Peter Rollings, CEO of estate agent Marsh & Parsons, said: “National house prices are mirroring the plight of the economy, and it is only a shortage of properties available that is preventing larger falls in many parts of the country. Mortgage lending figures are still heading south, and lenders’ conservatism is being felt most keenly by first-time buyers. This is keeping the lower tiers of the housing market sedated, removing the bottom-up impetus needed to drive a recovery in prices outside of London.   

 “It’s not yet clear whether the funding for lending scheme will serve as a much needed shot of adrenaline for the housing market. The prospect of the scheme has already triggered a wave of incredibly cheap rates for the equity rich, and those with substantial deposits are reaping the benefit. If we see these cheaper rates applied to higher loan to value mortgages following the scheme’s launch, we could see a bounce in first-time buyer figures, buoying sales activity in the second half of the year.”