UK House Prices Record Largest Drop in Eight Years

Arabic - House prices in Britain recorded their largest decline in August since 2018, as the usual seasonal slowdown in the property market during this time of year was exacerbated by concerns over anticipated tax increases in the government budget.

According to Rightmove, the property company, the average house price in Britain fell by 2% this month to $497,600 (£365,900), while prices dropped 1% year-on-year, marking the largest annual decline since December 2023.

The housing market in the capital, London, remains the most affected by rising mortgage interest rates and fears of higher taxes, with house prices in London falling 3.1% over the year ending in August. In contrast, house prices in southern England fell 1.8% year-on-year, while the average price in the north rose by 1.5% over the past year.

Rightmove has lowered its forecasts for national house price growth to between 0% and -2%, noting that “the unstable geopolitical situation, changes in the mortgage interest rate landscape, and the new Chancellor’s first budget in October are all factors that make it difficult to predict what will happen for the rest of the year.”

The decline in London prices coincides with the highest number of homes available in the capital in 16 years, but Rightmove pointed out that the average house price in the capital currently equals about 17 times the national average income.

Colleen Babcock, a property expert at the company, said that London residents face disproportionately high registration fees, and alongside the abundance of options, the capital faces greater affordability challenges for buyers due to rising price-to-income ratios and increased taxes.