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House prices fell by 5.3% in the year to August – a bigger-than-expected drop, according to Nationwide.

This means the typical home is now worth £14,600 less than 12 months ago – with an average property price of £259,153.

Nationwide’s chief economist, Robert Gardner, says the softening is “not surprising” – with interest rate hikes by the Bank of England sending mortgage payments higher.

Activity in the housing market is currently running well below pre-pandemic levels – with mortgage approvals about 20% below the 2019 average in recent months.

But Mr Gardner struck an upbeat note after Nationwide’s latest House Price Index was released – and said “a relatively soft landing is still achievable.”

He added: “In particular, unemployment is expected to remain low (below 5%) and the vast majority of existing borrowers should be able to weather the impact of higher borrowing costs, given the high proportion on fixed rates, and where affordability testing should ensure that those needing to refinance can afford the higher payments.”

And while activity may remain subdued in the near term, Mr Gardner believes a mix of income growth and lower house prices could improve affordability if mortgage rates cool.

Tesco cuts prices – and it’s good news for parents | Cost of living latest

Andrew Wishart, senior property economist at Capital Economics, believes this “marks the start of a significant further drop in house prices”.

He believes that, by mid-2024, house prices will be 10.5% below their August 2022 peak – with mortgage rates set to remain between 5.5% and 6% for the next 12 months.

Analysis: For many, house prices can’t fall far enough


Paul Kelso - Health correspondent

Paul Kelso

Business correspondent

@pkelso

The UK housing market has long lost touch with reality – but the recent modest fall in prices, confirmed by the Nationwide house price index figures for August, does follow the logic of economic trends.

After 14 consecutive Bank of England increases pushed the base rate to 5.25% and many mortgages beyond 6%, it would have been a surprise had the housing market not been affected.

While prices have been falling the volume of completions has stalled too, reflecting perhaps that many potential movers are waiting to see where rates will peak before they take the plunge.

For those looking to sell or buy from an existing home the impact will be largely theoretical, with the cost of remortgaging and the swingeing impact of stamp duty far more consequential in decision making.

A drop of more than 5% will be most welcome to first-time buyers, but the benefit will likely be wiped out by the increased cost of the mortgage required to get on the ladder in the first place.

For millions, prices cannot fall far enough to make that first step realistic, the hike in borrowing costs compounding an affordability crisis that has seen the average house price balloon to eight times the average wage in two decades.

According to Nationwide, there was a 25% drop in first-time buyers in the first half of 2023 when compared with 2019.

“A first-time buyer earning the average wage and buying a typical first-time buyer property with a 20% deposit would now see their monthly mortgage payment absorb over 40% of their take-home pay (with a mortgage rate of 6%) – well above the long run average of 29%,” Mr Gardner added.

There has also been a shift in the types of properties being purchased – with a big decline in demand for detached houses as buyers look for smaller, less expensive places.

Additional housing bills are piling more misery on families at a time when the main measure of inflation is easing back from the highs of last winter, when unprecedented energy costs hit Western economies.

The evolving cost of living crisis has squeezed affordability and demand at estate agents – and the Bank wants a wider economic slowdown to help cool the pace of price rises.

Data released by the Bank earlier this week showed that mortgage approvals had dropped by almost 10% last month.

Separate figures from property website Zoopla suggested that the UK was on track for about one million house and flat sales by the end of this year – the lowest level since 2012.

Average rates for two and five-year fixed residential mortgages remain above 6%.

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Renters now in the majority in UK

Higher funding costs for lenders are down to expectations the Bank of England still has some way to go in its battle against inflation.

Financial markets currently expect the Bank’s rate to peak just shy of 6% early next year – from its current level of 5.25%.

Nationwide, like other mortgage lenders in the shifting rate environment, revealed on Thursday that it was reducing some fixed and tracker products by up to 0.15 percentage points from today.

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Child sexual exploitation victims ‘not in scope’ of violence against women and girls strategy

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Child sexual exploitation victims 'not in scope' of violence against women and girls strategy

Victims of child sexual exploitation are “not explicitly within the scope” of the Violence Against Women and Girls (VAWG) strategy being drafted by the government, Sky News can reveal.

Child Sexual Abuse and Exploitation (CSEA) is a form of child abuse, described by police as a “critical threat” to women and girls.

It includes crimes such as grooming, and can involve both physical contact, such as rape, or non-physical – like forcing children to look at sexual images.

Sky News has been shown an internal Home Office document presented to various stakeholders in the sector.

Screenshot detailing strategy
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Screenshot detailing strategy

It’s titled “Scope of the Strategy… Our draft definition of VAWG”, and says that while it recognises “links” between VAWG and child sexual exploitation, it is not “explicitly within the scope of the strategy”.

“VAWG is Violence Against Women and Girls. If you take child sexual abuse out of it, where are the girls?” Poppy Eyre told Sky News.

Poppy was sexually abused and raped by her grandfather when she was four.

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It wasn’t until she was 11, after a PHSE lesson on abuse at school, that she understood the enormity of what had happened.

“I remember very vividly when the police came round and told me… this is what we’re charging him with,” said Poppy.

“We’re charging him with sexual abuse and rape. And I remember being like, I had no idea that’s what it was, but I know that’s really bad.”

Poppy Eyre was sexually abused and raped by her grandfather when she was four
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Poppy Eyre was sexually abused and raped by her grandfather when she was four

Poppy’s grandfather was convicted and died in prison.

She questions how authorities would police crime if child sexual abuse is excluded from an umbrella strategy to tackle violence against women and girls.

“Are they holding child sexual abuse at the same level of importance as they are with violence against women? You’d hope so, but potentially not, because it doesn’t need to be in the figures”, she said.

'Are they holding child sexual abuse at the same level of importance?' asks Poppy
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‘Are they holding child sexual abuse at the same level of importance?’ asks Poppy

The government has pledged to halve VAWG within a decade, by 2035.

“If the government are measuring themselves against halving violence against women and girls – if they’re not looking at the scale of child sexual abuse and child sexual exploitation within that – that will mean we are failing many young victims of abuse,” said Andrea Simon, director of campaign group End Violence Against Women.

The Centre of Expertise on Child Sexual Abuse, which is funded by the Home Office, estimates 500,000 children in England and Wales are sexually abused every year.

‘Danger’ of having separate plan

Rape Crisis told Sky News that “for any strategy to be effective” it “must include all forms of gender-based violence against all women and girls”, suggesting there is a “danger” in having a separate plan for child sexual abuse.

Its chief executive, Ciara Bergman, said it could create a “problematic and potentially very unhelpful” distinction between victims of domestic abuse, expected to be covered by the strategy, and child sexual abuse.

“Some perpetrators of domestic abuse also sexually abuse their children,” she told Sky News.

The government insists the strategy will include action to tackle child sexual abuse, but says it also plans to create a distinctive programme to address its specific crimes.

Poppy's mother Miranda Eyre says she's 'speechless' and 'angry' over the government's approach
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Poppy’s mother Miranda Eyre says she’s ‘speechless’ and ‘angry’ over the government’s approach

“Sexual abuse is violence against a child,” said Poppy’s mother, Miranda Eyre, who now works as a counsellor specialising in trauma.

“It is violence against girls… and you can’t separate it out,” she said. “I’m speechless to be honest… it does make me quite angry.”

Read more from Sky News:
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A Home Office spokesperson told Sky News it is “working tirelessly to tackle the scourges of violence against women and girls and child sexual abuse”.

“These issues are complex and run deep within the fabric of society,” they added.

“The government wholly recognises that they overlap. But it also recognises that concerted action is needed to tackle child sexual abuse which is why we have set out a range of actions… and why we are launching a national inquiry into grooming gangs.”

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British veteran, 100, recalls witnessing Japan’s Second World War surrender on USS Missouri

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British veteran, 100, recalls witnessing Japan's Second World War surrender on USS Missouri

A British veteran has spoken about how he witnessed Japan’s wartime surrender up close as a 20-year-old sailor.

Reg Draper was off Japan’s coast on the HMS Duke of York when the captain announced the war was ending.

Recalling that moment – 80 years ago today – he said cheers went up from the battleship’s crew.

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Why is it important to mark VJ Day?

Mr Draper saw the Japanese sign the agreement on USS Missouri when he went on board to help his friend, who was the ship’s photographer.

“All the ships mustered in Tokyo Bay with the USS Missouri, which was the American ship, and it was on the Missouri where they signed the peace treaty,” the 100-year-old recalled.

“Then we all came back down to Australia and we went and celebrated – we went down to Tasmania and everybody had four days leave in Hobart.

“Everybody wanted to take us to their home and there were a couple of dances in the dance hall.”

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Mr Draper still has a photo showing the peace deal being signed. Pic: Royal British Legion/PA
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Mr Draper still has a photo showing the peace deal being signed. Pic: Royal British Legion/PA

Mr Draper got a letter recognising his presence at the surrender. Pic: Royal British Legion/PA
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Mr Draper got a letter recognising his presence at the surrender. Pic: Royal British Legion/PA

Mr Draper, who grew up in Leeds, was a stores assistant on the Duke of York after volunteering on his 18th birthday.

His duties included rationing out the rum so all the sailors could get their 11am hit. He said senior crew got theirs neat while everyone else had theirs watered down.

He also recalled being clattered by Prince Philip after the Queen’s future husband, who was on a destroyer escorting his ship, came aboard.

A view looking out over the HMS Duke of York. Pic: AP
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A view looking out over the HMS Duke of York. Pic: AP

Mr Draper met Prince Philip again in the 70s - but the hockey wasn't mentioned. Pic: Royal British Legion/PA
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Mr Draper met Prince Philip again in the 70s – but the hockey wasn’t mentioned. Pic: Royal British Legion/PA

“We used to have deck hockey on the quarter deck and it was murder playing deck hockey,” said Mr Draper.

“He [Philip] knocked me over once and then the next time he came round he hit me, there’s still a mark there, he gave me a clout with his hockey stick.

“He came to see me just to see how I was. They just put a stitch in and it was alright.”

The pair met again in 1972 when Mr Draper was training sea cadets for the Duke of Edinburgh awards.

He said Philip noticed his medals and recalled escorting the ship – but didn’t mention the hockey game.

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Hiroshima survivor describes moment of blast

Mr Draper’s time on the Duke of York included Arctic convoys to deliver supplies to Russia and sailing to Sydney, Australia, in 1945 before joining the East Indies Fleet.

“We started going up to the islands, kicking the Japanese out of the islands as we went,” he recalled.

Japan surrendered after the US dropped two nuclear bombs on Hiroshima and Nagasaki, on 6 and 9 August.

Read more:
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Mr Draper now lives in Elton in Cheshire. Pic: PA
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Mr Draper now lives in Elton in Cheshire. Pic: PA

Mr Draper turned 21 on the trip back to Europe and said 2,000 people were on board as they had picked up prisoners of war.

He went on to become an insurance salesman and said he’s planning to watch today’s 80th anniversary commemorations from his home in Elton, Cheshire.

The King released an audio message in which he said the sacrifices of VJ Day veterans should “never be forgotten”.

He described how the heroic actions of those sent to fight in the Far East, as well as the brutal treatment of civilians, “reminds us that war’s true cost extends beyond battlefields, touching every aspect of life”.

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King to warn that sacrifices of VJ Day veterans should ‘never be forgotten’

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King to warn that sacrifices of VJ Day veterans should 'never be forgotten'

The King will issue a warning that the sacrifices of the VJ Day veterans should “never be forgotten” as they “gave us more than freedom; they left us the example of how it can and must be protected”.

In an audio message, due to be released on Friday morning to mark 80 years since the end of the Second World War in the Far East, King Charles will describe how the heroic actions of those sent to fight there and the brutal treatment of civilians “reminds us that war’s true cost extends beyond battlefields, touching every aspect of life”.

In what could be interpreted as him alluding to current world events and conflicts, he will emphasise the importance of international collaboration, saying that victory in 1945 demonstrated that “in times of war and in times of peace, the greatest weapons of all are not the arms you bear but the arms you link”.

Pic: PA
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Pic: PA

The six-minute audio message to the Nation, Realms and Commonwealth to mark VJ Day, echoes the audio broadcast made by his grandfather, King George VI, which the King will reference.

He recorded it in the Morning Room at Clarence House earlier this month.

Victory over Japan (VJ Day) was declared on 15 August 1945, following Imperial Japan’s surrender to Allied Forces.

With Victory in Europe (VE Day) declared in May 1945, some have felt that historically VJ Day has been overlooked, undervaluing the sacrifices of those who continued to fight on for another three months.

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In his message, the King will say that the service and sacrifice of those who fought and died in the Pacific and Far East “shall never be forgotten”.

He will also refer to the experience endured by prisoners of war and to the innocent civilians of occupied lands in the region.

Read more:
UK veteran, 100, recalls witnessing Japan’s Second World War surrender

Survivors’ relatives pledge to make Nagasaki last ever atomic bomb site
My grandmother survived world’s deadliest air raid

King Charles and Queen Camilla will also publicly mark the anniversary by attending a national service of remembrance at the National Memorial Arboretum in Staffordshire.

The service, run in partnership with the Royal British Legion, will be attended by Burma Star recipients, a veteran of the British Indian Army and those involved in the Battles of Kohima and Imphal.

Prisoners of war held across the region and veterans stationed in the UK or Commonwealth countries who contributed to the war effort will also attend. A two-minute national silence will be held at midday.

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