Property prices in the three months to the end of August were 6.9% higher than the same period in 2015, according to the latest index data.
Quarter on quarter prices were up 0.7% but down 0.2% month on month, the index from the Halifax shows but property experts say it is a seasonal monthly slowdown rather than a Brexit effect.
It mean that the average home is now priced at £213,930 and the index report says that the slowdown is consistent with predictions made at the end of 2015 rather than a result of the historic referendum vote to leave the European Union.
‘Increasing difficulties in purchasing a home as house prices continued to increase more quickly than earnings were expected to constrain demand, curbing house price growth,’ said Martin Ellis, Halifax housing economist.
The 0.7% quarterly growth was lower than the 1.5% recorded in July and is the lowest quarterly rate since December 2014 when it was 0.5%. But Ellis pointed out that the quarterly rate of increase has been on a downward trend over the past six months since peaking at 3% in February.
Yearly growth of 6.9% was down from 8.4% in July, continuing the downward trend since March when the annual rate reached 10% and is the lowest yearly growth rate since October 2013 when it was also 6.9%.
Ellis also said that the modest monthly decline of 0.2% between July and August was the smallest of the four monthly falls so far this year and he added that the quarter on quarter change is a more reliable indicator of the underlying trend.
Graham Davidson, managing director of Sequre Property Investment, believes that the figures reveal a healthy market that has not stalled, as many predicted, as a result of the referendum.
‘Confidence is likely to grow further and we predict that prices will be driven by growth in developing areas, such as Liverpool, Manchester and Leeds, where relative affordability can still be obtained. The buy to let sector in particular is booming,’ he added.
The figures show stability and a degree of resilience, according to Rob Weaver, director of investments at residential property crowdfunding platform Property Partner, adding that any fall in demand after the stamp duty hike in April has been offset by the lack of supply in the summer months.
‘While the market has slowed to a degree since the referendum, the annual and quarterly rates of growth are positive signs for investors. According to the Bank of England’s chief economist, owning property is a better bet than a pension,’ he said.
‘The government is preparing a multi-billion pound package to support house building longer term and stimulate the economy, a clear indication of the significance of the housing market to the UK’s prosperity. The Bank of England’s base rate cut last month has provided a much-needed confidence boost and eased some of the jitters over Brexit,’ he added.
A year ago many would have regarded such a slowdown in house price rises as cause for concern, but in today’s environment the figures are curiously reassuring as they are further evidence that the post-Brexit property market slump has not happened, said Jonathan Hopper, managing director of Garrington Property Finders.
‘House hunting traditionally takes a back seat in August, and this year the summer slowdown amplified the post-Brexit sluggishness. With both supply and demand falling, the result is a benign stalemate with average prices creeping up as the number of sales falls,’ he pointed out.
‘On the front line we’re seeing strong intent but a lack of clarity among buyers. August’s cut in interest rates and resilient levels of consumer confidence mean there are some determined buyers out there. There’s a growing sense that this is a buyer’s market, with the boldest frequently asking for substantial discounts in return for the certainty of a sale,’ he explained.
Price growth has eased, and among the top tiers of the market, prices have returned to more genuine market levels. Brexit concerns continue to limit both supply and demand, but prices continue to rise, albeit at more modest levels. It’s not yet business as usual in the property market, but as we approach the Autumn market there are signs we’re getting there,’ he added.
Russell Quirk, chief executive officer of eMoov, also believes it is a seasonal adjustment. ‘This decrease is nothing more than a seasonal adjustment due to the slower pace of the market during the summer months,’ he commented.
