Property prices in the UK dropped by 1% in July, which has largely cancelled out the 1.2% rise in June, the latest Halifax data has revealed.
However, the building society points out that monthly falls often occur within an upward trend, suggesting that the quarter-on-quarter change is a more reliable indicator of underlying trends. In the three months to July, house price were 1.6% higher than in the preceding three months. This was above June’s 1.1% quarterly increase and similar to the 1.5% rate recorded in both April and May.
Looking at annual figures, house prices in the three months to July were 8.4% higher than in the same quarter in 2015. This remains unchanged from June and is the lowest annual price rise since the 7.8% growth seen in July 2015.
In a separate report, Halifax says the number of first-time buyers has gone up by around 10% in the first half of 2016, compared with the same period in 2015. There was an estimated 154,200 first-time buyers in the first six months of 2016, compared with 140,500 in the same period last year. However, the 2016 figure is almost a fifth lower (36,700) than a decade ago.
Martin Ellis, Halifax housing economist, says: “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.
“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.”
Summer is traditionally slower for property transactions
Commenting on the data, Russell Quirk, founder and chief executive of online estate agent eMoov.co.uk, says: “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.
“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.”
Ben Madden, managing director of London estate agent Thorgills, adds: “Although house prices are easing in the post-Brexit world, they’re proving far stickier than many predicted. This week’s quarter point cut in interest rates certainly won't send house prices skyrocketing, but it will help to further stabilise them.
“The acute supply shortage was always going to act as a glass floor under prices post-Brexit and the latest rate cut has made that floor a few inches thicker.
“People today are a lot more streetwise than they were when the global financial crisis struck home. There’s more caution in property transactions, certainly, but people are more attuned to uncertainty and understand that life has to go on.
“Committed buyers and seller are very much active, while window shoppers have fallen away. To an extent, this has injected an extra efficiency into the market.”