UK house prices in July recorded their steepest monthly decline since 1992, and their second steepest since 1968, UK House Price Index data released Wednesday showed.
The 3.7 per cent plunge from June to July contrasted with a 0.8 per cent rise in the same period the previous year. It meant the value of an average home fell £10,000 to £255,535 ($353,428).
July's stark price drop is a corollary of this reduced demand but, despite the fall, UK house prices were still up 8 per cent since the start of the year.
One property expert compared the housing market to a “bad Hollywood blockbuster” given the predictability of the drop following “an explosive start” to the year.
“Demand remains robust and the economic backdrop increasingly has a feel-good factor as Covid disappears into the rear-view mirror,” said Tom Bill, head of UK residential research at Knight Frank.
Mr Bill believes rising supply levels will dictate the suppressed course of price growth for the rest of 2021.
“We expect seasonality and needs-driven buyers to play an important role in driving supply higher, which should start to curb house price growth,” he said.
“The monthly decline in July was the largest since 1992 and the second steepest since 1968, and we therefore expect annual growth to end the year in single digits.”
Regionally, house price growth was strongest in the north-east of England, where prices increased by 10.8 per cent in the year to July 2021. The lowest annual growth was in London, where prices increased by 2.2 per cent in the year to July 2021.