UK house prices keep rising, says Halifax
But slight drop in June figures adds further evidence to suggestions of a slowdown
Alex Johnson has been part of The Independent's online team since 2007. He has been writing about microarchitecture on his internationally-acclaimed Shedworking blog since 2006 and is the author of Shedworking: The Alternative Workplace Revolution. His latest book is Bookshelf, published by Thames & Hudson.
Wednesday 09 July 2014
House prices between April and June were 2.3 per cent higher than the previous three months, according to the latest report.
The Halifax index shows that, while house prices fell slightly by 0.6 per cent in June compared to May, they are still 8.8 per cent higher than this time last year, standing now at £183,462 (although other house price indices vary considerably in estimating this figure).
Earlier this month Nationwide statistics put the annual rise higher at over 11 per cent but it chief economist Robert Gardner predicted that the pace of growth would start to slow soon.
Overall, sales of homes were down by three per cent in May, dropping below 100,000 for the first time in half a year although transactions were still 15 per cent higher than in May last year.
Stephen Noakes, Mortgages Director, said that housing demand was being supported by an economic recovery that is 'gathering pace'.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said the three month average was a more reliable figure than the month-on-month figures which showed a dip.
"With estate agents reporting that applicant levels are falling, fewer sealed bids and packed open houses, some moderation is returning to the market," he said. "As more property comes up for sale, with vendors worrying that they may have missed the boat, the heat has come out of the housing market.
"The threat of an interest rate rise is there in the background, influencing people's willingness to take on more debt. Fixed-rate mortgages are still cheap however, although they are edging up slightly. The mortgage market review is having an impact and slowing things down although we expect this to be temporary as lenders get to grips with the new regime."
Andy Hatoum, co-founder of the property search engine Placebuzz.com agreed that the monthly figures should be taken with a pinch of salt and that the overall direction of prices was 'still skyward'.
"After runaway month-on-month growth in May, June’s slight drop would seem like a sudden reversal," he said. "But in reality it’s a case of the market pausing for breath. As prices begin to top out in some areas, such volatility is inevitable.
"There is still plenty of momentum in much of the country, especially in those areas where the boom took longer to get going. Robust economic growth and cheap credit have combined to stoke confidence, and convinced many of us that the only way is, and will continue to be, up.
"New buyer enquiries may be dipping, but the Bank of England’s modest measures to tighten lending conditions will do little to temper the wave of optimism that continues to drive prices upwards. Even if the excesses of London and the South East may be close to peaking, the strong growth in other regions still has a long way to run."
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