However, prices are still up some 8.8% on an annual basis and 2.9% on the quarter.
Russell Galley, managing director, Halifax, said: “It is important to put such a moderate decrease in context, with average prices still more than £21,000 higher than this time last year, following a broadly unprecedented period of gains.
“With the stamp duty holiday now being phased out, it was predicted the market might start to lose some steam entering the latter half of the year, and it’s unlikely that those with mortgages approved in the early months of summer expected to benefit from the maximum tax break, given the time needed to complete transactions.
“That said, with the tapered approach, those purchasing at the current average price of £260,358 would still only pay about £500 in stamp duty at today’s rates, increasing to around £3,000 when things return to normal from the start of October.”
But despite the potential cooling Mark Harris, chief executive of mortgage broker SPF Private Clients, said brokers were still flat out.
He said: “June was a record-breaking month for our mortgage brokers as borrowers pulled out all the stops to take advantage of the full stamp duty saving. With mortgage rates low and lenders with plenty of money to lend, cheap borrowing and affordability will continue to give buyers more purchase power, and result in continued demand, even if the peak of the market has passed.
“Lenders’ appetite to lend seems to be growing all the time, with HSBC and TSB the latest banks to offer two-year fixes at just 0.94 per cent. Sub-1 per cent mortgage rates have been rare in the past but over the past few weeks there have been many more of them.’
“While the tapering of the stamp duty holiday has begun, there is still a saving to be had over the summer for buyers closing in on a purchase.”
Tomer Aboody, director at MT Finance, added: “Although June saw a slight downward trend in price growth, demand from buyers has never been higher.
“The full stamp duty break may be over now but some further relief is still available until October, which will keep fuelling the market.
“Regional areas beyond the capital have seen a large shift and hike in demand and prices over the past 12 months. Demand for more space is uppermost in buyers’ minds, which is hard to come by in the capital unless you have significant sums to be able to do so. Even though property price increases in London have been less stellar than elsewhere, prices are still at their highest in the capital and continue to rise, putting property ownership further beyond the reach of first-time buyers in particular.
“While the government may feel it has done all it can with stamp duty concessions, a longer-term solution to releasing more property to the market may be to reduce or remove stamp duty for downsizers.”
