Editor's note: This brief was summarised by The Property AI Newsroom from a report by Guardian Property. Read the original article for full details.

UK House Prices Record First Annual Fall Since 2023, Says Lloyds

UK house prices have fallen for the first time in nearly three years, according to new data from Lloyds. The average property price in August was £298,468, down 0.4% year-on-year, as higher mortgage rates and economic uncertainty weighed on the market.

Lloyds reported that this is the first annual decrease in UK house prices since November 2023. The bank’s monthly index showed a 0.2% drop, or £685, in average property prices compared to July. The decline was attributed to higher mortgage rates, geopolitical uncertainty, and stretched affordability for buyers.

Lloyds noted that many homeowners are choosing to stay put, with sellers reluctant to accept lower offers. The lender also reported that mortgage approvals were at their lowest level since the start of 2024. Buyers seeking mortgage deals have faced volatility, with the average two-year fixed residential mortgage rate at 5.6% and the average five-year deal at 5.66% as of Friday, according to Moneyfacts. Both rates were below 5% at the start of the year.

Regional differences were highlighted in the report. Northern Ireland saw the strongest house price growth, with the average home rising by 6.9% year-on-year to £231,245. Scotland’s average price increased by 3.5% to £223,437, and Wales saw a 0.6% rise to £230,282. In England, the north-east and north-west recorded growth of 2.7% and 2% respectively, with average prices of £184,370 and £248,675. In contrast, the south-east experienced the largest drop, with prices down 1.6% to £381,729, while Greater London saw a 1.5% decrease to £534,177.

Lloyds described the UK housing market as “subdued” due to higher inflation, borrowing costs, and geopolitical tensions. The bank indicated that while sellers are not rushing to cut prices, many are waiting for market conditions to improve, and buyers are holding off in anticipation of changes in interest rates.

These trends are relevant for letting agents and inventory clerks monitoring market activity, as subdued sales and regional price variations may impact rental demand and property turnover.