House prices have fallen in July in response to interest rate rises and the average mortgage being sought by first time buyers has reached its lowest level in 18 months, a report suggests.
Data from Moneyextra.com shows the average property value in July was £218,033, a 4.65% decrease on the previous month and up just 1.63% on an annual basis.
The average mortgage amount sought by first time buyers also fell to £132,699, from a peak of £145,173 in April, the lowest level since January 2006.
The value of mortgages actually complete by Moneyextra.com’s customers was £151,488 in July, down from a high of £166,732 in May.
Robin Amlôt, senior editor of Moneyextra.com, comments: “The reason it’s taken so long for the housing market to reflect the higher cost of borrowing is the large number of people who were on fixed rate mortgages whose fixed rate periods are only now coming to an end.”
Amlôt says recent stock market turmoil has increased the likelihood of a further interest rate rise in September, meaning the peak of the interest rate cycle is yet to be reached and the downward trend in house prices may continue.
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