According to the Halifax, house prices fell for a fourth straight month in July. A 0.3 percent monthly decline was in line with the market consensus and followed an unrevised 0.1 percent dip in June. However, positive base effects still saw annual inflation edge up from minus 2.6 percent to minus 2.4 percent.

The quarterly change, the best guide to underlying developments, was minus 0.3 percent, its first negative print after fourth successive readings above zero. Regionally, the South East (minus 3.9 percent) posted the steepest annual drop ahead of London (minus 3.5 percent) but all parts of the UK bar the West Midlands recorded declines. Looking ahead, the Halifax expects an ongoing affordability squeeze to constrain market activity and lead to house prices continuing to fall into next year. However, the drop is thought likely to be gradual rather than precipitous.

Today's update puts the UK ECDI and ECDI-P at 14 and 20 respectively, both measures showing economic activity in general running somewhat ahead of market expectations.

Prices are expected to drop 0.3 percent on the month after a 0.1 percent dip in June.

The Halifax House Price Index (HPI) is the UK's longest running monthly house price measure with data covering the whole country going back to January 1983. The index is based on the largest monthly sample of mortgage data, typically covering around 15,000 house purchases per month, and covers the whole calendar month. In March 2016 Markit announced that it would be acquiring the Halifax HPI from Lloyds Banking Group. Halifax continues to publish the index on behalf of Markit and both the name and the basic methodology remain unchanged. However, in May 2020, the annual growth measure was changed from the average of the last three months to just the latest month.

Home values affect much in the economy - especially the housing and consumer sectors. Periods of rising home values encourage new construction while periods of soft home prices can damp housing starts. Changes in home values play key roles in consumer spending and in consumer financial health. During the first half of this decade sharply rising home prices boosted how much home equity households held. In turn, this increased consumers' ability to spend, based on wealth effects and from being able to draw upon expanding home equity lines of credit.