HOUSE prices have fallen at their fastest rate for 12 years as soaring mortgage rates hit buyer demand.
They were down 2.6 per cent — or £7,500 — in June compared with the same month last year, according to Halifax.
3
It is the biggest annual slip since 2011, leaving the average cost at £285,932.
But buying a property is still tougher than ever for many, as prices are almost nine times average earnings and interest rates are continuing to rise.
Lenders Lloyds, Santander, Skipton, Nationwide and Paragon will face MPs on Tuesday to give evidence on mortgage stress amid fears that rates will keep going up.
Prices are still a fifth higher than before Covid.
A boom in 2021, driven by a change in living and work habits in lockdown, pushed them up.
But buyers who bought during that frenzy are now facing a mortgage shock as interest rates have moved from 2.25 per cent to above six.
Kim Kinnaird, director of Halifax Mortgages, said: “The resulting squeeze on affordability will inevitably act as a brake on demand, as buyers consider what they can realistically afford.
“While there’s always a lag effect when rates go up, many existing mortgage holders with variable deals or rolling off fixed rates will likely face an increase in the next year.”
Most read in Money
JD SPAIN GAIN
JD SPORTS is buying the rest of its Iberian business for £426million.
The deal will give it the remaining 49 per cent stake in Iberian Sports Retail Group, which has 460 shops across Spain, Portugal and the Netherlands.
It continues the “global growth strategy” at JD, which has 3,400 shops worldwide.
BED NEWS DAY
ONLINE mattress retailer Emma has been ticked off for duping consumers with false promotions.
Watchdog the CMA said only a fraction of its mattresses sold at “full price”, so claims that they could be bought at 60 per cent off were misleading.
It also rapped the use of countdown clocks to pressure buyers.
EMPIRE’S FALL
EMPIRE CINEMAS has fallen into administration, resulting in the instant closure of six cinemas as well as 150 redundancies.
The chain blamed the heavy toll of Covid and the cost of living crisis for depressing sales.
3
3
Eight cinemas will remain open while administrators at BDO work to find a buyer.
But cinemas at Sunderland and Wigan are among those closing.
It comes after the much larger chain Cineworld filed for US bankruptcy protection earlier this year.
