UK recession fears swirl as factory output falls and house prices slide – as it happened

Nationwide reports average house prices fell 3.8% in year to July, biggest annual drop in 14 years, while manufacturers suffer worst month of 2023

• UK shop prices in first monthly fall for two years amid big discounts
• UK house prices fall at fastest rate since 2009 after interest rate rises

These charts from Nationwide show how UK house prices have dropped around 4.5% from their peak last summer, but are still sharply above their pre-pandemic levels.

Estate agent Knight Frank are hopeful that sentiment in the housing market will improve through the rest of this year.

Higher borrowing costs have knocked sentiment and forced buyers to recalculate their budgets but the property market hasn't slammed on the brakes. The bank rate is nearing its peak, which means that while sentiment will remain subdued, it will only improve in the second half of this year.

That said, prices and sales volumes will come under pressure as the market descends from the highs of the pandemic and adjusts to the new lending environment.