British house prices fell in July for a fourth month and the slide looks set to extend into 2024, but the market showed some signs of resilience despite a rise in borrowing costs, mortgage lender Halifax said on Monday.

Prices fell 0.3 per cent from June, adding to similar falls since April, Halifax said.

In year-on-year terms, they were down by 2.4 per cent, a slightly smaller drop than June’s 2.6 per cent decline which was the largest such fall since June 2011.

Britain’s housing market has slowed in the face of a relentless run of interest rate increases by the Bank of England since December 2021 aimed at reining in stubbornly high inflation.

But the decline in house prices has so far been small compared with the surge in valuations during the COVID pandemic.

Average prices remained about 45,000 pounds ($57,250), or 19 per cent, above pre-pandemic levels, according to Halifax.

It said prices were little changed over the last six months and demand from first-time buyers was holding up, with some of them seeking smaller homes to offset higher mortgage rates.

However, the buy-to-let sector appeared to be under pressure, possibly pointing to more homes being put up for sale which could ease a long-standing shortage of properties on the market and weigh further on prices.

Kim Kinnaird, director of Halifax Mortgages, said house prices were likely to continue falling into next year, echoing previous comments by the lender.

“Based on our current economic assumptions, we anticipate that being a gradual rather than a precipitous decline, and one that is unlikely to fully reverse the house price growth recorded over recent years,” Kinnaird said.

A Reuters poll of analysts published in early June pointed to a 3 per cent fall in house prices in 2023 before flat-lining in 2024.

But some economists have pencilled in a bigger fall due to the rise in mortgage rates in recent weeks.

“While house prices are proving relatively resilient so far, the significant rise in mortgage rates is set to cause a renewed slump in demand, while previously tight supply conditions are easing,” Imogen Pattison, with Capital Economics, said.

“As a result, we expect house price falls to accelerate in the second half of the year. This should leave house prices 10.5 per cent below their peak on the Nationwide measure.”

Nationwide, another mortgage lender, said last week its index of house prices fell by the most since 2009 in the 12 months to July.

($1 = 0.7860 pounds)