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House prices in the last three months (May-July) were 0.2 per cent lower than in the previous three months (February-April). This was the fourth successive quarterly fall; the first time this has happened since November 2012, according to Halifax.
Prices in the three months to July were 2.1 per cent higher than in the same three months a year earlier. This was lower than in June (2.6 per cent) and is the lowest annual rate since April 2013 (2.0 per cent). The annual rate has fallen from a peak of 10.0 per cent in March 2016.
House prices rose by 0.4 per cent between June and July, partially offsetting the 0.9 per cent decline recorded between May and June.
Russell Galley, Managing Director, Halifax Community Bank, said:
“House prices continue to remain broadly flat, as they have since the start of the year. Prices in the three months to July were marginally lower than in the preceding three months, while the annual rate of growth has edged down from 5.7% in January to 2.1% in July; the lowest rate since April 2013.
“The rise in the employment level by 175,000 in the three months to May helped push the unemployment rate down to 4.5%, the lowest since June 1975. However, this improvement in the jobs market has not, as yet, boosted wage growth, resulting in earnings rising at a slower rate than consumer prices. This squeeze on spending power, together with the impact on property transactions of the stamp duty changes in 2016 now being realised, along with affordability concerns, appear to have contributed to weaker housing demand.
“However, a continued low mortgage rate environment, combined with an ongoing shortage of properties for sale, should help continue to support house prices over the coming months.”