2017 House price growth flattens

Recent research has shown that house price growth has reduced to 2.6% in the last three months until June.

Data from the Halifax indicated that April to June was 0.1% lower than the three months prior – the first time this has happened since November 2012.

Despite the dip, prices in the three months to June were 2.6% greater than in the corresponding period in 2016. However, this is lower than May’s rate of 3.3% and is the lowest annual rate since May 2013 (2.6%). Annually speaking, the rate has fallen since the peak during March last year where it reached 10%.

During May to June this year, house prices dropped by 1.0% – the first month on month fall since January.

On a National basis, house prices in June were 9% higher than the peak reached in August 10 years ago.

Commenting on the figures was Martin Ellis. The Halifax housing economist highlighted the impact of pressured household finances as well as employment levels on the most recent rate of growth.

“House prices have flattened over the past three months. Overall, prices in the three months to June were marginally lower than in the preceding three months. The annual rate of growth has fallen, to 2.6%; the lowest rate since May 2013.

“Although employment levels continue to rise, household finances face increasing pressure as consumer prices grow faster than wages. This, combined 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.”

Also sharing his thoughts on the data was founder and CEO of eMoov, Russell Quirk. He stated: “Contrasting figures from Halifax after Nationwide reported signs of a pulse returning to the UK property market, but given both sets of numbers, it would seem reports of a market demise have clearly exaggerated.

“Despite the recent claims the market is due to see a notable crash with prices falling by as much as 40%, this remains very unlikely.

“The market is not dead or running on the life support of easily obtained credit and has suffered more of a grazed knee than a fatal injury.

“A momentary blip is certainly not substantial enough to label as a trend and those that have, are doing so prematurely. Resilient levels of buyer demand, heightened by a paltry supply of stock and coupled with historically low-interest rates will continue to fuel house price growth in the medium and long term.”

Today's Conveyancer