House prices dropped by 0.2% between July and August, putting the average property in the UK at £213,930 – down by nearly £3,000 since June’s EU referendum, the latest data from Halifax reveals.
While house prices seem to be softening, they have still continued to rise on a quarterly and annual basis. In the three months to August, property prices were 0.7% higher than in the previous quarter, although they were down from the 1.5% quarterly rise reported in July. Similarly, the annual rate of growth fell from 8.4% in July to 6.9% in August.
While Martin Ellis, housing economist at Halifax, suggests that there are “signs of a softening in sales activity”, he adds that this slowdown was not unexpected and was consistent with Halifax’s forecast at the end of 2015.
“Increasing difficulties in purchasing a home as house prices continued to increase more quickly than earnings were expected to constrain demand, curbing house price growth,” he says.
However, estate agents are unperturbed by the slight softening of the market, putting it down to a seasonal slowdown over the summer.
Alex Gosling, chief executive of online estate agency HouseSimple, says: “The post-Brexit armageddon and its predicted dire repercussions for the property market simply haven’t materialised.
“House price growth has slowed by 0.2% since July, but it would be hysterical to attribute this softening to anything but a seasonal slowdown. August is traditionally a more sluggish time for the property market with house price growth feeling the affects of the summer lull.
“September will provide a much better gauge as to the health of the housing market, as typically the number of buyers and sellers picks up significantly.
"Sellers probably need to be prepared to negotiate as we're seeing more buyers putting in lower offers. But with quality stock levels very low, many properties are still going for close to asking price."
Jeremy Leaf, a north London estate agent and a former RICS (Royal Institute of Chartered Surveyors) residential chairman, adds: “These figures are not a huge surprise, confirming what has been reported in other data published recently – that house prices are still rising on an annual and quarterly basis, but not as quickly as previously.
“The good news for homeowners is that the situation could have been much worse, given the fact that these figures reflect the period following the referendum.”
Jonathan Hopper, managing director of Garrington Property Finders, says: “A year ago, many would have regarded such a slowdown in house price rises as cause for concern.
“But in today’s environment they are curiously reassuring – as they are further evidence that the post-Brexit property market is making a soft landing rather than slumping.
“Househunting traditionally takes a back seat in August, and this year the summer slowdown amplified the post-Brexit sluggishness.
“With both supply and demand falling, the result is a benign stalemate – with average prices creeping up as the number of sales falls.
“There’s a growing sense that this is a buyer’s market, with the boldest frequently asking for substantial discounts in return for the certainty of a sale.”