THE price of an average house fell by around £14,000 in the year to the end of August, according to new data.

The Halifax said UK property values had dropped by 4.6% compared to August last year, the largest year-on-year decrease since 2009.

However, the bank said the numbers were compared to record-high prices last summer.

In August alone, prices fell by 1.9%, the lender said, the steepest since last November, putting the average price of a house at £279,569 – a drop of around £5,000 since July.

“It’s fair to say that house prices have proven more resilient than expected so far this year, despite higher interest rates weighing on buyer demand,” said Kim Kinnaird, director, Halifax Mortgages.

“However, there is always a lag-effect where rate increases are concerned, and we may now be seeing a greater impact from higher mortgage costs flowing through to house prices.

“Increased volatility month-to-month is also to be expected when activity levels are lower, though overall the pace of decline remains in line with our outlook for the year as a whole.”

She said buyers may have decided to put off buying amid soaring interest rates, hoping for stability to emerge in the market.

“The market will continue to rebalance until it finds an equilibrium where buyers are comfortable with mortgage costs in a higher range than seen over the previous 15 years,” Kim added.

“We do expect further downward pressure on property prices through to the end of this year and into next, in line with previous forecasts.

“While any drop won’t be welcomed by current homeowners, it’s important to remember that prices remain some £40,000 (+17%) above pre-pandemic levels.

“It may also come as some relief to those looking to get onto the property ladder.

“Income growth has remained strong over recent months, which has seen the house price to income ratio for first-time buyers fall from a peak of 5.8 in June last year to now 5.1.

“This is the most affordable level since June 2020, and will be partially offsetting the impact of higher mortgage costs.”