The value of a home in south-east England has dropped by £15,500 over a year after the region recorded the sharpest fall in house prices in July.
Halifax, the High Street lender, said average house prices in the area, which includes the home counties, fell 3.9%.
House prices in Wales, once the beneficiary of the pandemic “boom”, also tumbled.
Overall, however, Halifax said the UK’s housing market was showing resilience, despite higher mortgage costs.
It said average prices fell by 2.4% in the year to July, valuing a typical home at £285,044. That is slower than the 2.6% decline recorded in the year to June.
Despite the falls, prices remain much higher than before the Covid pandemic.
Some regions saw sharper drops than others. The value of a home in south-east England dropped to £382,489 in July.
Wales, which Halifax said had seen “some of the most rapid growth in house prices witnessed during the pandemic ‘boom'”, recorded one of the largest annual falls at 3.3% to £214,495.
Greater London also saw prices drop by 3.5% in July, but the average price is much higher at £531,141 compared to other regions.
Average house prices fell in almost all parts of the UK in July apart from in the West Midlands, where they remained unchanged.
The north east of England remains the cheapest place to buy a home with the average price being £167,594.
Commenting on the housing market in the UK, Kim Kinnaird, director at Halifax Mortgages, which is owned by Lloyds Banking Group, said it “continues to display a degree of resilience in the face of tough economic headwinds”.
“In particular, we’re seeing activity among first-time buyers hold up relatively well, with indications some are now searching for smaller homes, to offset higher borrowing costs,” she added.
Last week, the Bank of England raised interest rates for the 14th time in a row. The increase from 5% to 5.25% will lift the cost of borrowing money for many mortgages.
On Monday, the average two-year fixed mortgage rate ticked lower to 6.84%, while the average five-year deal was unchanged at 6.35%, according to financial data firm Moneyfacts.
But there have been suggestions that the current interest rate level could be the peak for consumers, with banks and building societies starting to cut mortgage rates, according to Laura Suter, head of personal finance at AJ Bell.
Andrew Bailey, the Bank of England’s governor, told the BBC there was an “adjustment” to house prices going on. But he cautioned: “I think we should avoid preaching crisis at this point, it’s not that.”