UK home sales decline by 4%
The latest Halifax House Price Index data has reported:
- House prices in the latest three months (June-August) were 3.0% higher than in the preceding three months
- Prices in the three months to August were 9.0% higher than in the same three months a year earlier
- The average monthly costs associated with buying a three bedroom house in the UK for a first-time buyer are £56 lower than the typical monthly rent paid
House prices in the latest three months (June-August) were 3.0% higher than in the preceding three months (March-May). The quarterly rate of change increased from July’s 2.5% but remained below June’s 3.3%.
Prices in the three months to August were 9.0% higher than in the same three months a year earlier. This was lower than June’s 9.6% but higher than last month’s 7.8%.
House prices increased by 2.7% between July and August. This is the biggest monthly rise since May 2014 (+3.8%). Monthly movements, however, can be volatile and the quarter on quarter change is a more reliable indicator of the underlying trend.
Buying is still cheaper than renting – The average monthly costs associated with buying a three bedroom house in the UK for a first-time buyer was £666 in June 2015; 8% (£56) lower than the typical monthly rent paid on the same property type (£722 a month). With the price of a typical first-time buyer home rising by 8% over the past year, the difference between the cost of owning and the cost of renting has narrowed from £85 in to £56 over the past year.
Home sales fell in July – UK home sales declined by 4% between June and July, but remained above 100,000 for the second successive month, at 100,720. In contrast, sales were consistently below 100,000 between October 2014 and May 2015. Sales in the three months to July were 3% higher than in the previous three months. (Source: HMRC, seasonally-adjusted figures)
Mortgage approvals rise again in July – The volume of mortgage approvals for house purchases – a leading indicator of completed house sales – increased by 3% in July to the highest level since February 2014. Approvals in the three months to July were 5% higher than in the preceding three months (February-April) and 4% higher than in the same three months last year. (Source: Bank of England, seasonally adjusted figures)
Supply remains very low – The stock of homes available for sale fell again in July to another new record low. New instructions by sellers also declined in July, the sixth successive monthly fall and the eleventh decline in the past 12 months. (Source: Royal Institution of Chartered Surveyors’ (RICS) monthly report)
Doug Crawford, CEO of myhomemove, the UK’s largest provider of mover conveyancing services comments:
“The property market has been suffering from a drought in supply for several months and today’s Halifax data shows this is forcing house prices sky-high as buyers compete for the properties that are available.
“Our conveyancers have seen a rise in gazumping in some parts of the market this summer. Sellers have made the most of the hand that has been dealt to them by waiting to see if they get a better offer. With prices climbing so quickly, many sellers have calculated that it is worth their while accepting a new offer even if it means waiting a bit longer to complete their sale.
“The Bank of England decision to put off an interest rate rise because of concerns over turbulence in the global economy, mean that low mortgage costs and plentiful lending continues to feed buyers’ appetite. The only question is whether record high prices will tempt more existing homeowners to bring their property to the market and ease the serious shortage in supply.
“People trying to climb onto the housing ladder for the first time are the losers from rocketing prices. We are seeing an increase in people using gifted deposits from family and friends to help them make up the gap, as prices climb further out of reach.”