Latest figures from the Halifax suggest that property values in the UK fell for the first-time since February in July.
With the post-election surge in house prices slowing as the market enters the traditional quieter summer months, experts believe that prices will soon revert.
Fall
Data from the Index shows that house prices dipped slightly by 0.6% in July to stand at £198,883. July aside, the average house price in the UK has risen every month since February. [1]
Halifax’s report also indicates that house prices in July of this year were 7.6% higher than at the same period in 2014, although this did represent the slowest pace of growth so far this annum. House price growth reached a peak at 9.6% in the twelve months to June.[1]
In addition, the Halifax also stated that confidence in the market in terms of future house price growth had also slowed, following post-election optimism. Tighter lending criteria and the threat of an interest rate rise early in 2016 has also contributed to less positivity in the market.
Cash-buyers
Independent buyer Henry Pryor believes that the rising number of people paying with cash will continued to make prices increase in the long run. He is concerned that this will make it more difficult for first-time buyers with a mortgage and deposit to get onto the first rung of the property ladder.
‘Buyers are obviously stretching themselves to afford the record prices which are increasing far faster than wages,’ Pryor noted. ‘The gap is often being filled by the bank of mum and dad over whom the state has little control.’[1]
Pryor also said that, ‘we have reached the bonkers situation where kids are borrowing money from their parents to be able to afford the prices that their parents’ generation as asking.’[1]
Adam Challis, head of residential research at JLL also commented that while he expects price growth to become more moderate in the long-term, it will, ‘remain ahead of wage improvements.’[1]
[1] http://www.telegraph.co.uk/finance/property/11786449/House-prices-dip-in-June-but-the-warning-light-is-still-flashing.html?utm_campaign=Landlords%20%26%20Property&utm_content=18388153&utm_medium=social&utm_source=twitter