House prices have fallen again but at a slightly slower pace as first-time buyers helped steady the market as they decided to search for smaller homes.

The average cost of a property declined by 2.4pc in the year to July, according to the Halifax house price index, having dropped by 2.6pc in June, from 1.1pc in May.

It means a typical home is worth £285,044. Prices fell 0.3pc in July in a fourth consecutive monthly decline.

It comes after a separate index said house prices fell at their fastest pace since 2009 in July.

Nationwide said homeowners saw the value of their bricks and mortar drop by 3.8pc in the year to July, with the average property worth £260,828.

This was down 4.5pc since the peak in August last year.

Halifax Mortgages director Kim Kinnaird said: “These figures add to the sense of a housing market which continues to display a degree of resilience in the face of tough economic headwinds.

“In particular, we’re seeing activity amongst first-time buyers hold up relatively well, with indications some are
now searching for smaller homes, to offset higher borrowing costs. 

“Conversely the buy-to-let sector appears to be under some pressure, though elevated interest rates are just one factor impacting landlords’ business models, together with considerations of future rental market reforms.” 

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