The average UK house price fell annually in August, marking the first year-on-year decrease since November 2023, according to an index.
A 0.4% average annual drop in property values was recorded by Lloyds in August.
The typical house price fell by 0.2% month on month, following a 0.1% month-on-month decrease in July.
Across the UK, the average house price in August was £298,468.
Andrew Asaam, mortgages director at Lloyds, said: “The average property now costs £298,468, marking the first annual fall in house prices since November 2023”.
“Despite that, prices are still marginally up (a 0.2% increase) since the start of the year,” he said.
“The housing market has faced a more difficult backdrop in recent months, with the impact of global events on inflation and borrowing costs creating greater economic uncertainty. What we’re not seeing is a rush of homeowners cutting prices,” he said.
“But more are choosing to sit tight, with sellers reluctant to accept offers they feel are too low, while some buyers are waiting to see how conditions develop,” he stated.
“Average house prices remain around 25% higher than they were at the end of 2019, despite the substantial increase to interest rates seen over recent years,” he added.
Northern Ireland continued to record the strongest annual house price growth, Lloyds said, with prices up by 6.9% annually and the average property value standing at a record high of £231,245.
Scotland also recorded solid growth, with prices rising by 3.5% annually, the report said.
In Wales, the average house price has increased by 0.6% annually while within England growth remained strongest in northern regions, Lloyds said.
By contrast, price growth remains under pressure across much of southern England, reflecting the greater affordability challenge caused by higher average prices, the bank added.
Looking ahead, Mr Asaam said that Lloyds expect the market to remain fairly subdued in the months ahead, but this will likely only have a limited impact on house prices.
“While affordability remains a challenge, wages continue to grow and employment has held up better than many anticipated. This will help to support demand from those who need or want to move,” he said.
