House prices dip in three months to July
Figures from the lender show that average house prices in the quarter to July were 2.1% higher than those for the same period in 2016. This is the lowest annual growth rate since April 2013 (2%).
The research underlines the ongoing slow-down in the growth rate, having fallen from its peak of 10% in March 2016.
Russell Galley, managing director, Halifax Community Bank, said: “House prices continue to remain broadly flat, as they have since the start of the year. Prices in the three months to July were marginally lower than in the preceding three months, while the annual rate of growth has edged down from 5.7% in January to 2.1% in July; the lowest rate since April 2013.”
Discussing some of the broader economic factors at play, he added: “The rise in the employment level by 175,000 in the three months to May helped push the unemployment rate down to 4.5%, the lowest since June 1975. However, this improvement in the jobs market has not, as yet, boosted wage growth, resulting in earnings rising at a slower rate than consumer prices. This squeeze on spending power, together with the impact on property transactions of the Stamp Duty changes in 2016 now being realised, along with affordability concerns, appear to have contributed to weaker housing demand.”
Despite these factors, Galley believed the continued low-mortgage rate environment, combined with an ongoing shortage of properties for sale, should help continue to support house prices over the coming months.
Founder and CEO of eMoov.co.uk, Russell Quirk, was upbeat about the figures and said: “Yet more promising signs for the UK housing market with further evidence of a marginal uplift in prices on a monthly basis. Time certainly seems to have been a healer and as we move away from the previous period of political uncertainty that has plagued the property market of late, we should see a growing degree of stability return for UK homeowners.”
Jeremy Duncombe, director, Legal & General Mortgage Club, highlighted the need for the government to address the ongoing housing shortage to ensure properties remained both available and affordable.
He said: “A long-term plan to address the UK’s chronic lack of suitable housing remains vital, but that plan also needs to be put into action. Government and industry must come together, and soon, to make a conscious effort to resolve the housing crisis and create enough homes for our growing population, across all tenures – renters and buyers.”