UK house prices fell at their fastest rate since July 2009 as rising interest rates depress the property market, according to Nationwide.
In its monthly health check of the property sector, the lender said the average house price fell by 3.8% year-on-year in July, the biggest drop since the aftermath of the financial crisis.
That compares to a 3.5% annual drop in house prices in June and takes the price of a typical home down to 4.5% below the August 2022 peak.
Prices dipped by 0.2% in July alone, on a seasonally adjusted basis, to an average of £260,828, down from £262,239.
Robert Gardner, Nationwide's chief economist, said: “Housing affordability remains stretched for those looking to buy a home with a mortgage.
“While activity is likely to remain subdued in the near term, healthy rates of nominal income growth, together with modestly lower house prices, should help to improve housing affordability over time, especially if mortgage rates moderate once Bank Rate peaks.”
Victoria Scholar, head of investment at interactive investor, noted the housing market "is in the doldrums with sellers struggling to achieve desired offers and therefore are less willing list their properties, particularly over the seasonally quiet summer period".
She pointed out with the Bank of England poised to raised interest rates again on Thursday, the housing market is likely to continue to cool this year.