House Prices Fall for Second Month Running
Average house prices in the UK dropped for a second month in a row in July, according to Halifax.
The latest house price index from the nation’s biggest mortgage lender revealed that the average value of a property in the UK fell by 0.2% in July, following on from a 0.4% drop in June. The average house price in July was £236,120.
Average house prices haven’t seen a monthly a rise since May when they grew by 1.2%. However, house prices have been growing slowly over the last year, as the average price last month was still 4.1% higher than it was in July 2018.
“The average UK house price fell slightly for a second month, as the market continues to tread water with marginal increases or decreases in each monthly period,” said Russell Galley, managing director at Halifax. “That said, it’s worth remembering that while economic uncertainty continues to weigh on the market, the overall trend actually remains one of comparative stability, with average prices down by less than £600 over the last three months.”
According to HMRC, 84,490 homes were sold in June 2019 – a 16.5% drop compared to last year. Many analysts are pointing to the economic uncertainty surrounding the UK’s departure from the EU as a reason for prospective buyers holding back. However, Halifax said that strong wage growth and low interest rates is behind a 10% rise in new buyer enquiries in June.
“We have seen a reported drop off in the number of properties sold during the early months of summer, which may lead some to speculate a downturn is on the horizon,” said Mr Galley. “However, new buyer enquiries are up, and favourable mortgage affordability, driven by low interest rates and strong wage growth, should continue to underpin prices for the time being. In the longer term, we believe there is unlikely to be a step change in market activity until buyers and sellers see some form of resolution to the current economic uncertainty.”
Howard Archer, chief economist at EY ITEM Club, said: “Housing market activity seemingly got some help from the avoidance of a disruptive Brexit at the end of March, but the overall benefit looks to have been limited. With Brexit due to occur on 31 October – and it currently very unclear what will happen then – uncertainty will weigh down on the economy over the next few months at least and hamper the housing market.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “It is still very much steady as she goes for the housing market. The summer is always quieter as people head off on their holidays but with new buyer inquiries up, there are encouraging signs that business may pick up in the autumn. However, until the Brexit deadline of October 31 has passed, it seems very unlikely that there will be a serious uptick in activity.”