Halifax: House price growth begins to settle in July | Mortgage Introducer

Img

This represents a growth of 2.4% over the quarter, and 7.6% annually.

However, this shows a slower rate of growth compared to an annual increase of 8.7% in June.

The average UK property price is now £261,221, compared with £242,684 at the same point last year, and £260,099 the month before.

Regionally, Wales and the North of England saw the strongest annual house price growth in July.

The 13.8% increase in Wales represented the strongest growth recorded since March 2005.

In Yorkshire, an 11% gain was the highest for over 16 years.

In comparison, London only saw an increase of 2.5%, while gains in the South East and Eastern England also remained among the lowest in the UK.

Russell Galley, managing director at Halifax, said: “House prices rose by 0.4% in July to add £1,122 to the cost of the average property, pulling back some of the ground lost during June (-0.6%, -£1,543).

“Annual price growth fell to +7.6%, its lowest level since March.

“This easing was somewhat expected given the strength of price inflation seen last summer, as the market began its recovery from the first lockdown, and with activity supported by the start of the stamp duty holiday.

“In cash terms, typical prices now stand at just over £261,000, a little below May’s peak but still more than £18,500 higher than a year ago.

“Recent months have been characterised by historically high volumes of buyer activity, with June the busiest month for mortgage completions since 2008.

“This has been fueled both by the ‘race for space’ and the time-limited stamp duty break.

“With the latter now entering its final stages (the zero percent rate only applies to the first £250,000 of the purchase price, before reverting back to standard rates from October), buyer activity should continue to ease over the coming months, and a steadier period for the market may lie ahead.

“Latest industry figures show instructions for sale are falling and estate agents are experiencing a drop in their available stock.

“This general lack of supply should help to support prices in the near-term, as will the exceptionally low cost of borrowing and continued strong customer demand.

“Although there remains some uncertainty over the impact on employment from the unwinding of government support schemes, on balance the risks to the macro-environment are receding, with consumer confidence improving, the labour market recovering, and the economy expanding as restrictions are lifted.

“Overall, assuming a continuation of recent economic trends, we expect the housing market to remain solid over the next few months, with annual price growth continuing to slow but remaining well into positive territory by the end of the year.”