Average UK house prices were down month-on-month in July, according to the latest government House Price Index.
The HM Land Registry report shows that the average property price in the UK for July was £255,535. This is an annual increase of 8.0%, but a monthly drop of -3.7%.
James Forrester, Managing Director of Barrows and Forrester, comments: “A prolonged period of property panic buying spurred by the chance of a Stamp Duty saving has seen UK homebuyers essentially clear the shelves over the last year.
“So, a natural market adjustment is always going to occur in the run-up to each of the staggered deadlines. However, the proof in the pudding is yet another strong annual rate of growth and the reality is that there has been no let-up in demand, while available stock also remains scarce.
“So, where the long-term health of the market is concerned, we are yet to see any signs of a wobble.”
Marc von Grundherr, Director of Benham and Reeves, comments: “While there is no snooze button this time around where the Stamp Duty deadline is concerned, the end of this government tax reprieve is unlikely to act as a pothole in the property market’s road to recovery.
“A certain level of natural realignment is to be expected but those who judge the market on such an erratic, short term metric as monthly house price growth are ill-advised to do so.
“We’re now heading into what is traditionally one of the busiest times of the year and we expect buyer demand to remain consistently high throughout.
“We also expect the return of foreign buyer demand to further boost the UK housing market over the coming months, with London, in particular, seeing a sharp increase in market activity and house price growth.”
Colby Short, Founder and CEO of GetAgent.co.uk, comments: “Before we run for the hills at the first sight of a house price decline it’s important to note that the market has been moving at a record pace for a sustained period of time and so a pause for breath is more than natural.
“We know the Stamp Duty holiday has had an incredible impact and so a monthly decline following both deadlines is to be expected. However, market sentiment is still extremely high and while mortgage affordability remains at record lows, the housing market will continue to blossom well into autumn and beyond.”
Iain McKenzie, CEO of The Guild of Property Professionals, says: “These figures show a slight readjustment in the market, fuelled by a partial slowdown in activity in some parts of the country.
“There remains an uneven balance between demand and supply, and some buyers will be holding back until estate agents are able to increase their stock again, after months of frenzied purchases.
“On the other hand, desperate buyers who want to get in the market as soon as possible will be willing to pay more to outbid others, and this is likely to result in further house price growth this year.
“Prices continue to grow faster in areas that are traditionally considered cheaper, such as the North East. More people are getting their foot on the property ladder here and the Stamp Duty holiday still applies to properties under £250,000.
“If prices do fall slightly, this may encourage more first-time buyers to make the leap toward home ownership, but they will also need to remain buoyant to entice more homeowners to sell.”
Nicky Stevenson, Managing Director at national estate agent group Fine & Country, says: “The housing market has been on afterburners for so long, it’s hard to imagine growth doing anything other than slowing over the rest of the year.
“As the Stamp Duty holiday tapers this could be the start of that gradual softening, though sustained falls in valuations remain unlikely with bidding wars still rife for the most desirable homes.
“The market continues to be thrown off balance in many parts with buyer demand high and supply definitely down. We’re still seeing ‘For Sale’ signs being ripped out of the lawn almost as soon as they are planted in some areas, and in many parts of the country estate agents’ shelves are still looking bare.
“While this new data suggests things may be calming, it’s far too early to predict the end of the boom. Don’t be surprised to see more record highs this year, in what remains a sellers’ market. Most analysts have given up trying to predict the future.”