Annual house price growth was flat in the UK in June, latest index shows
The latest house price index confirms that the UK property market has slowed, with annual growth flat in June 2018.
House prices in the three months to June were 1.8% higher than the same period a year earlier, marginally lower than the 1.9% annual growth in May, according to the data from lender the Halifax.
Month on month prices increased by 0.3% and quarter on quarter they were down by 0.7%, taking the average price of a home to £225,654.
Russell Galley, managing director of the Halifax, said that both price growth and sales have softened compared to the final months of 2017 even although the jobs market is seeing strong growth.
But he pointed out that halfway through the year the annual rate of growth is within the lender’s forecast range of 0% to 3% for 2018. ‘We continue to see very positive factors of continuing low mortgage rates, great affordability levels and a robust labour market. The continuing shortage of properties for sale should also continue to support price growth,’ he added.
Russell Quirk, chief executive officer of hybrid estate agent Emoov, believes that the market will see stable growth in 2018 and an uplift in activity in the second half of the year. ‘Property values are still up annually while supply levels remain subdued and continue to be exceeded by buyer demand as a result of mortgage affordability. These are not the ingredients for a market crash,’ he said.
There is a lack of energy and direction in the property market, according to Jonathan Samuels, chief executive officer of property lender Octane Capital. ‘While the jobs market may be strong and mortgage rates still highly competitive, many households continue to feel the pinch and remain wary of the potential fallout from Brexit,’ he said.
‘You’d expect July to be equally lacklustre while people wait and see whether the Bank of England increases rates next month following this week’s strong construction and services sector data. The chances of a rate rise have just increased and that is likely to dampen activity levels further during July,’ he pointed out.
‘As ever, the lack of homes on the market will prevent prices going into freefall. For anyone keen to buy, there are slim pickings at present. It’s a buyers’ market and many prospective sellers are choosing to sit it out rather than take a hit,’ he added.
Lucy Pendleton, director of independent estate agents James Pendleton, explained that sales, new buyer enquiries and supply have been depressed for some time now and ever fewer numbers of buyers line up for homes that have seen prices shoot up over the past few years.
‘This is being masked in part by the stamp duty relief for first time buyers and the Help To Buy Scheme which are turning renters into buyers. This has to come to a head eventually with the gap between sellers’ expectations and buyers’ bids closing up,’ she said, adding that it has started to happen, particularly in London.
‘The national trend of prices fading from record highs lately shows it has started happening more widely, as it must if the market is to avoid seizing up. The more prepared both buyers and vendors are to adjust their expectations, the less of a consolidation in prices you can expect to see, all other things in the economy being equal of course,’ she concluded.