10 July 2017
House prices across the UK last month increased at the lowest year-on-year rate seen in more than four years, according to the latest Halifax index.
The annual rise recorded in June stood at 2.6 per cent – the lowest since May 2013 and about a quarter of the double-digit rate seen in the spring of last year. On a monthly basis, prices declined by one per cent between May and June, bring the average price across the country to £218,390.
Martin Ellis, Halifax housing economist, said, “House prices have flattened over the past three months. Although employment levels continue to rise, household finances face increasing pressure as consumer prices grow faster than wages. “This, combined with the new stamp duty on buy-to-let and second homes in 2016, appears to have weakened housing demand in recent months.
“A continued low mortgage rate environment, combined with an ongoing acute shortage of properties for sale should help continue to underpin house prices over the coming months.”
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, agreed, saying he did not expect a continuing fall in prices over the rest of the year.
“The dip in Halifax’s measure of house prices – which dragged year-over-year growth down to its lowest rate since May 2013 – probably doesn’t mark the start of a sustained fall in prices,” he said. “The index is volatile even at the best of times, and Nationwide reported a 1.1 per cent month-to-month rise in its similar measure of prices in June. The underlying trend in prices probably is flat.”
The number of properties being sold has also held up relatively well with figures from HM Revenue and Customs showing that the number of sales in the three months to May was one per cent higher than in the previous quarter.