UK house prices fell in August as market continues to cool

Numbers from Halifax contrast sharply with more positive data from rival lender Nationwide

Halifax’s figures are at odds with Nationwide’s more positive numbers (Getty)

British house prices fell in August, dragging the growth rate for the year to its slowest since 2013 during the Brexit vote period, according to new figures from Halifax.

The numbers contrasted sharply with more positive data from rival lender Nationwide.

Prices fell 0.2 percent in August, after dropping 1.1 percent the month before. By contrast, Nationwide’s survey, the other respected national measure of house prices, recorded two consecutive monthly rises.

House prices in the three months to August were still 6.9 percent higher than a year earlier, the smallest increase since October 2013 and down from a growth rate of 8.4 percent in July.

Quarterly figures, which are regarded as more reliable measure of the market than those for one month, showed growth of 0.7 per cent. This was the lowest figure since December 2014, and has fallen from a peak of 3 per cent in February.

Housing market activity dropped off in the run-up to the Brexit vote as big purchases were put off. The introduction of higher stamp duty also caused a surge of purchases in the early months of the year which then fell back significantly.

“The slowdown in the rate of house price growth is consistent with the forecast that we made at the end of 2015,” Halifax economist Martin Ellis said.

“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,” Ellis added.

Halifax did not mention any direct effect from Britain's June 23 the Brexit vote, but others such as the Royal Institution of Chartered Surveyors have said it is weighing on sales and the outlook for prices.

RICS said in July that inquiries from new buyers had fallen significantly. Nationwide said in its report earlier this month that house prices were being kept afloat by a chronic restriction of supply, combined with ultra-low interest rates, rather than strong demand for homes.

“Looking ahead, the forthcoming stagnation of households’ real incomes, as inflation picks up and firms moderate hiring plans, will subdue consumer confidence and constrain prices,” said Samuel Tombs, economist at Pantheon Macroeconomics.