The property market is witnessing the largest drop in housing prices in 12 years in June while mortgage rates still soar.
Halifax states that the average price dropped by 2.6% compared with last year, which is the biggest fall since 2011. The average cost of UK property is now at £285,932, equalling £7,500 off the market price within the last month alone.
“The latest fall comes as soaring mortgage rates, driven by a series of interest rate hikes by the Bank of England to curb inflation,” we read in The Independent.
At the moment, an average two-year fixed residential mortgage rate is 6.54%, up from an average rate of 6.52% on Thursday. All the while, homeowners and buyers have been warned that the rates can go up to 7% this summer to curb inflation.
House prices are still up by around £4,000 (or 1.5%) so far this year.
“With markets now forecasting a peak in bank rate of over 6%, the likelihood is that mortgage rates will remain higher for longer, and the squeeze on household finances will continue to put downward pressure on house prices over the coming year,” Kim Kinnard, Halifax Mortgages
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