British house prices experienced their most widespread declines last month since 2009, triggered by interest rates reaching a 15-year peak. Simultaneously, rents saw the most significant surge since 1999 due to a growing number of landlords selling their properties, as indicated by a survey.
The Royal Institution of Chartered Surveyors (RICS) reported that its house price balance, a metric gauging the difference between the percentage of surveyors reporting price increases and decreases, declined to -53 in July from a revised -48 in June. This marks the lowest reading since April 2009, during the depths of the global financial crisis, falling below economists' expectations, which anticipated a drop to -50.
In July, interest rates for the most common type of new mortgage in Britain, a two-year fixed rate, climbed to 6.86%, the highest level since 2008. This increase was driven by expectations of further rate hikes by the Bank of England in its efforts to combat high inflation.
The property sales sector experienced the swiftest decline in July since April 2020, a period when the market was largely shuttered due to the Covid-19 pandemic. Furthermore, demand from potential buyers also diminished, according to RICS.
According to data from Britain's Office for National Statistics, private-sector rents in England climbed by 5.1% in the year leading up to June, marking the highest increase since records were initiated in 2006.