House prices in England and Wales have continued the downward trend and fell in June for the third month in a row with a decline of 0.2% to an average of £301,114, the latest index shows.
It means that while they are still up 3.8% compared to a year ago they are now on average £2,358 lower than their March peak, according to the data from the Your Move index.
But there is still considerable regional variation and a North-South divide. The East of England in particular continues to show strong annual growth with prices up by 6% year on year but month on month growth was just 0.3% to an average of £324,754.
Indeed, this was the strongest monthly growth. Prices were up month on month by 0.1% in Yorkshire and the Humber, the South West and the West Midlands to £183,712, £277,633 and £212,796 respectively and up 2.6%, 5.4% and 4.9% year on year.
In the North East and the North West prices were flat month and month and up 1.4% and 3.8% year on year to £155,902 and £184,874 respectively. They fell by 0.1% in East Midlands and the South East month on month and are still up by 4.7% and 4.8% to £202,680 and £372,894 respectively.
Prices fell by 0.5% in Greater London but are still 3.4% higher than a year ago at an average of £613,650 while in Wales prices were down by 1.1% month on month and are just 2% higher than a year ago at £172,863.
The index report points out that while the slide in house prices has coincided with the period since the calling of the general election in April, it is not the sole cause. The election announcement in April was mid-month, too late to have any real impact and at the time, the result looked in little doubt.
Instead, the election and its result have merely exacerbated a slowdown in price growth that can be seen since the beginning of the year, it explains but adds that predictions of a sustained correction still look premature.
For example, the market can rally, as it did after remaining flat for three months following last year’s European Union referendum and mortgage rates remain low, helping buyers. And, finally, transaction levels in June were encouraging, with an estimated 72,500, up 10% on May, marginally ahead of the increase expected, albeit with levels lower than last year.
‘Don’t write the market off just yet. We’ve seen three months of falls, but it’s far too early to panic. Mortgage rates are still affordable and the slowdown we have seen will already have helped some buyers struggling with affordability,’ said Oliver Blake, managing director of Your Move and Reeds Rains estate agents.
‘We’re still seeing strong growth in the East and in prime London. We’re also seeing a return to the North-South divide in terms of price growth. In many ways, it feels like we’ve been here before,’ he added.