LONDON, Aug 5 Reuters House prices in Britain fell the first time in more than a year in July in monthly terms and the market is likely to weaken further as interest rates go up and the costofliving squeeze tightens, mortgage lender Halifax said on Friday.

Prices, which recently hit record highs,edged down by 0.1 from June when they had risen by 1.4, Halifax said.

In annual terms, prices rose by 11.8, slower than a 12.5 increase in June.

The weakening of the house market comes after a boom triggered by the COVID19 pandemic and the switch to working from home which pumped up demand for bigger homes, and by rockbottom borrowing costs which are now rising again.

House prices are likely to come under more pressure as those market tailwinds fade further and the headwinds of rising interest rates and increased living costs take a firmer hold, Russell Galley, Halifax managing director, said.

Therefore a slowing of annual house price inflation still seems the most likely scenario.

Rival mortgage lender Nationwide said earlier this week that house prices rose in July at the slowest monthly pace in a year and Bank of England data has shown the lowest level of new mortgage approvals in two years in June.

The BoE raised interest rates on Thursday by the most since 1995 taking the Bank Rate to its highest level since 2008 as it seeks to limit the damage from a surge in inflation which is now expected to surpass 13 later this year. 

Halifax said London continued to record…