Figures released by Halifax this week show a 1% fall in the cost of homes between May and June 2017
The decrease was the first monthly decline reported since January 2017 and lowers the annual rate of growth to 2.6%, the lowest rate since May 2013. The average price of a UK home now stands at £218,390, according to the mortgage lender.
Martin Ellis, Halifax housing economist, commented: “Although employment levels continue to rise, household finances face increasing pressure as consumer prices grow faster than wages. This, combined with the new stamp duty on buy to let and second homes in 2016, appears to have weakened housing demand in recent months.”
However, the findings contradict those of competitor Nationwide, who announced a 1.1% increase in house prices in the month of June, placing the average house price at £211,301. Nationwide also revealed a drop in annual price growth in the London area – the second slowest pace of the 13 UK regions, and the weakest pace of growth in the capital since 2012.
Commenting on the figures, Robert Gardner spokesman for Nationwide, said: “There has been a shift in regional house price trends. Price growth in the South of England has moderated, converging with the rates prevailing in the rest of the country. The gap between the strongest performing region (East Anglia, which saw 5% annual growth) and the weakest (the North, with 1% growth) was the smallest on record, based on data going back to 1974. Nevertheless, when viewed in levels, the price gap between regions remains extremely wide.”
It is believed that continued low mortgage rates combined with an ongoing acute shortage of properties for sale should help continue to underpin house prices over the coming months, preventing an overall annual drop.