This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
The latest Halifax House Price Index reports that the average UK house price has dropped by 1% over the past month, following the Brexit vote. But does this mean that the property market has lost steam?
Between June and July, the average house price in the UK fell from £216,726 to £214,678 – a slight decline of 1%. However, prices in the three months to July are still 8.4% higher than in the same period of 2015.
Additionally, prices in the past three months were 1.6% higher than in the preceding three months. This is above June’s 1.1% increase, and similar to the rates of growth recorded in April and May (both 1.5%), but significantly lower than in February and March.
Has the Property Market Lost Steam?
However, the annual rate of growth, 8.4% in the three months to July, is unchanged from June, and is the lowest level since July 2015.
While house prices fell between June and July, following a 1.2% increase in June, Halifax claims that monthly changes can be erratic and falls often occur within an upward trend. Although this was the third monthly decline seen this year, it was lower than February’s 1.5% decrease.
The Housing Economist at Halifax, Martin Ellis, comments on the data: “House prices in the three months to July were 1.6% higher than in the previous quarter, up from 1.1% in June, but comfortably lower than earlier in the year. The annual rate of growth was unchanged at 8.4%; the lowest since July 2015.
“There are signs that house price growth is slowing, with a deceleration in both the annual and quarterly rates of increase in the past few months. Nonetheless, the current rates remain robust.”
He adds: “July’s monthly decline largely offsets June’s increase. The month-on-month changes, however, can be erratic and falls often occur within an upward trend. Overall, it remains too early to determine if there has been any impact on the housing market as a result of June’s EU referendum result.”
Halifax has also recently released its First Time Buyer Review. The report found that the number of first time buyers increased by around 10% in the first half of the year, compared with the same period in 2015.
There were an estimated 154,200 first time buyers in the first six months of 2016, compared with just 140,500 in the first half of last year. This was more than double the market low recorded in the first half of 2009 (72,700), but is almost a fifth lower than ten years ago, in 2006.
In response to the latest figures, the founder and CEO of eMoov.co.uk, Russell Quirk, comments: “This is the first full damage assessment of the UK property market by Halifax since Britain hit the Brexit iceberg back in June.
“Although it would seem the UK property market has lost steam since the vote, with prices dropping 1% since last month, the summer period is always a traditionally slower time of year for residential property transactions.”
He continues: “With prices still up 8.4% year-on-year, there’s no real evidence that UK homeowners need to jump ship just yet, and so I would urge them to remain calm and avoid any rash decisions.
“Once the market picks back up in a couple of months’ time and the Brexit uncertainty starts to subside, I’m confident the previous upward trend in value enjoyed by UK homeowners will continue.
“In the meantime, this slight slowdown in price growth, coupled with yesterday’s rate cut by the Bank of England, make it an ideal time for those considering a property purchase to strike while the iron is hot. Or slightly cooled in this case.”
