UK house prices fall for the first time in 11 years

House prices in England were reported to have fallen annually for the first time in 11 years in May.

In the statement made by the British housing credit institution Halifax, it was indicated that house prices in the country did not change on a monthly basis in May this year, but decreased by 1 percent annually.

The statement from Halifax, which is part of Lyods Banking Group, noted that the average home price is £286,582, noting that prices fell for the first time since December 2012 on an annual basis.

THERE WAS A SHORT-TERM INCREASE IN THE FIRST QUARTER

“As expected, the short-term rise in the housing market in the first quarter of the year slowed with the gradual reflection of high interest rates on household budgets and especially those whose fixed-rate mortgage agreements have expired.” said Kim Kinnaird, Halifax. Director of Home Loans, whose assessments were included in the statement.

With inflation still stubbornly high, markets are pricing in a few more rate hikes that will push the policy rate above 5 percent for the first time since early 2008, adding that these expectations have caused mortgage rates to rise. fixed prices begin to rise again throughout the country. The market.

‘WILL AFFECT CONFIDENCE’

“This will inevitably affect confidence in the housing market as both buyers and sellers revise their expectations,” Kinnaird said. Recent industry figures for both mortgage approvals and sales show cooling demand. Therefore, further downward pressure on house prices is expected.

Annual inflation in the UK, which was 10.1 percent in March, fell less than expected to 8.7 percent in April. This, in turn, strengthened expectations that the Bank of England (BoE) would have to raise interest rates again. It had raised market forecasts that interest rates will peak at 5.5 percent by the end of this year.

Following the inflation data for April, financial institutions reduced their offers of mortgage loans and adjusted rates in May. (AA)