House price growth slows into June according to Halifax

The rate of growth in house prices appears to be slowing according to the latest House Price Index from Halifax.

According to Markit, the financial information services company who now produce the index, prices rose 8.4% compared with June last year and 1.3% on May. Average prices were also 1.2% higher across April, May and June compared with the first quarter of the year.

Martin Ellis, Halifax housing economist, said: “There is evidence that the underlying pace of house growth may be easing. House prices in the three months to June were 1.2% higher than in the previous quarter; down from 1.5% in May. The annual rate of growth fell from 9.2% in May to 8.4%; the lowest since July 2015.

“House prices continue to increase, albeit at a slower rate, but this precedes the EU referendum result, therefore it is far too early to determine any impact since.”

Despite any referendum related uncertainty, the shortage of housing stock remains the underlying factor and dominant feature int he UK housing market, even with a decline in the number of people looking to buy.

Katherine Binns, Research Director at the HomeOwners Alliance said: “House prices continue to climb due to the lack of supply, coupled with no significant change to demand, ahead of the referendum.

“This is not good news for affordability as house prices have steamed ahead of wage increases – but the future may be brighter.  Before the referendum vote, there were already signs of fewer house sales in April and May compared to the previous year.

“In this period of Brexit uncertainty, the upward pressure on house prices will still be there due to  low interest rates and restricted supply. House prices are less likely to be affected by Brexit than they were by the 2007 financial crisis.”

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