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House prices slip again as cost of living rises in July

House prices dropped again in June while the cost of living continued to increase across the UK last month.

The Department for Communities and Local Government released their official house price figures today, showing that prices dropped 2 per cent to £204,981 in the year to June, representing a 0.6 per cent fall on the previous month.

The news comes as the Office for National Statistics revealed inflation increased to 4.4 per cent in July, putting more pressure on family budgets.

In terms of house prices, first time buyers paid 2.2 per cent less than a year ago, while former owner occupiers also paid 2 per cent less. Prices for new properties were 3.2 per cent up, while prices of pre-owned dwellings dropped by 2.4 per cent.

Average house prices decreased in eight of the nine English regions. The largest decrease was in the North West (-5.1 per cent) while the smallest was in the East (-0.2 per cent).   London saw an annual house price increase (1.5 per cent).

And there could be more to come as Rightmove recorded a 0.3 per cent fall year on year for its house price figures in August, with the average price now at £231,543. This represents a 2.2 per cent drop compared with July.

Meanwhile, July saw the Consumer Prices Index – which the Government uses to measure inflation - rise to 4.4 per cent from 4.2 per cent in June.

Financial services was a key driver – while bank fees fell a year ago, they rose this year, particularly for arranging mortgages.

Costs went up in housing and household services, mainly in housing rent and particularly for social housing provided by registered social landlords Furniture, household equipment and maintenance prices also usually fall between June and July due to the sales season. But this time costs fell by less down 1.1 per cent year pon year, compared with 1.9 per cent.

The Retail Price Index (RPI) inflation stayed at 5 per cent.

House Price Index:
Average mix-adjusted house prices in June stood at £212,508 in England, £144,396 in Northern Ireland, £162,363 in Scotland and £145,281 in Wales.

London remains the English region with the highest average house price, at £340,664. The North East has the lowest average price at £134,194.
Excluding London and the South East, the average UK price in June was £169,044,

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