House price annual growth slows to 8.4%

7 July 2016

Annual house price growth slowed down to 8.4% for the three months to June, compared with May’s figure of 9.2%, according to the Halifax House Price Index.

The measure compares a three month period with the same period a year earlier. June’s growth figure was also the lowest since July 2015 (7.8%).

The data covered the whole of June and therefore just six days of sales after the EU referendum. It puts the average price of a property in the UK in the three month period to June at £216,823, 1.2% higher than in the preceding three months (January to March).

“There is evidence that the underlying pace of house growth may be easing,” says Martin Ellis, Halifax housing economist.

However, he adds that “this precedes the EU referendum result, therefore
it is far too early to determine any impact since”.

The Halifax House Price Index also looked at the ratio of average house prices to income. It found that the ratio rose to 5.7% of earnings in June – the highest it has been since October 2007.


Katherine Binns, research director at consumer property group HomeOwners Alliance, says: “House prices continue to climb because of the lack of supply and no significant change to demand since the referendum.

“This is not good news for affordability as house prices have steamed ahead of wage increases. Before the referendum vote, there were already signs of fewer house sales in April and May compared to the previous year.

“In this period of Brexit uncertainty, the upward pressure on house prices will still be there due to low interest rates and restricted supply. House prices are less likely to be affected by Brexit than the 2007 financial crisis.”


However, Ben Madden, managing director of London estate agent Thorgills, says that he has yet to see any negative impact from Brexit. “The June price rise can be taken with a pinch of salt,” he says. “That was before the birth of Brexit. In the wake of the surprise vote for Brexit, the sales market has by no means imploded.

“While the vote to leave the EU came as a shock, the mere fact that we had a result was as if a weight had been lifted and people started to make firm buying decisions again.

“In the week after the referendum result, there was an immediate uplift in new sales instructions and an increase in buyer registrations. Despite widespread predictions that sales activity would drop off and sellers would have to accept price reductions, that simply hasn't materialised.

“What we anticipate is a reduction in window shoppers, those less motivated buyers with lists of property requirements as long as your arm, that inevitably decide to stay put. But we are seeing strong signs that committed buyers and sellers are now carrying on with their lives,” he adds.

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