Average house prices edged down last month, according to the latest Lloyds House Price Index – but the decline needs to be viewed in a wider context.

House prices across the UK fell slightly last month by 0.2%, meaning the average price of a property is now £298,468 compared with £299,153 in July, marking the first annual fall in house prices since November 2023. Despite this, house prices are still marginally up 0.2% since the start of the year.

Perspective is key

According to Andrew Asaam, Mortgages Director at Lloyds, the slight dip in the market has arisen from a combination of factors, including the impact of global events on inflation and borrowing costs, creating greater economic uncertainty. Sellers have also been reluctant to cut asking prices despite the more challenging market, while some buyers are putting their house search on hold to see how conditions develop. Together, these factors have led to fewer homes changing hands in recent months.

However, despite these pressures, Asaam highlights the importance of keeping recent price movements in perspective, saying we must bear in mind the growth in house prices over the past few years.

‘Average house prices remain around 25% higher than they were at the end of 2019, despite the substantial increase to interest rates seen over recent years,’ he states. ‘The market’s adjustment to higher borrowing costs has been gradual, with wage growth helping to offset some of the pressure on affordability. The recent modest declines in prices are best viewed in that wider context.’

Is now a good time to move?

But what does this mean for you if you’re currently hoping to move home? This obviously depends on your individual circumstances, but Asaam says that, while the UK housing market is likely to remain slow over the coming months, in reality this will likely only have a limited impact on house prices: ‘While affordability remains challenging, wages continue to grow and employment has held up better than many anticipated,’ he reassures. ‘This will help to support demand from those who need or want to move.’

If you’re considering a house move, speaking with an experienced mortgage broker who knows the market inside out is a great first step, as they can help you navigate a tricky market and complex lending landscape. If you need us, we’re here to help.