The latest figures from Halifax show a +2.1% annual increase in house prices, but there was a -0.2% drop over the last quarter (May to July), making it the fourth consecutive quarter to fall in price. However, there was a +0.4% increase from June to July, which now puts the average UK property price tag at £219,266.
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.
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.
However, a 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.Russell Galley
Halifax’s report explains that London continues to dominate the UK’s market where price is concerned, with the average cost per square meter costing £2,260 today, a +236% jump over the last two decades. London’s borough of Hackney tops the list for the highest increase in square meter price in the last twenty years at +753%.
The number of home sales across the UK has dropped by 3% from May to June, which are some of the lowest figures since October 2016. The lender predicts that home sales will likely remain stable in the coming months because mortgage approvals have largely stayed the same.
A shortage of homes available on the market is affecting the choice, ultimately making it more difficult for prospective homebuyers to find an appropriate property.
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.
Although prices are still down on the previous quarter and price growth is likely to remain fairly subdued for the remainder of the year, they continue to be up on an annual basis and given the current seasonality an increase no matter how small is a good sign during the peak of the summer months.Russell Quirk