On a monthly basis, house prices fell in the UK by 0.2% in July and by 0.4% quarter on quarter, according to data from the latest lender index, taking the average to £236,120.
It means that prices are still 4.1% above where they were in July 2018, but this comes against a backdrop of low growth in the corresponding period in 2018, according to the Halifax.
‘The average UK house price fell slightly for a second month, as the market continues to tread water with marginal increases or decreases in each monthly period,’ said Russell Galley, Halifax managing director.
‘That said, it’s worth remembering that while economic uncertainty continues to weigh on the market, the overall trend actually remains one of comparative stability, with average prices down by less than £600 over the last three months,’ he pointed out.
‘We have seen a reported drop off in the number of properties sold during the early months of summer, which may lead some to speculate a downturn is on the horizon. However, new buyer enquiries are up, and favourable mortgage affordability, driven by low interest rates and strong wage growth, should continue to underpin prices for the time being,’ he explained.
‘In the longer term, we believe there is unlikely to be a step change in market activity until buyers and sellers see some form of resolution to the current economic uncertainty,’ he concluded.
‘Brexit is undoubtedly playing a significant role in July’s house price dip of 0.2% with buyers perhaps still hesitant to make any property move,’ said Dilpreet Bhagrath, mortgage expert at Trussle.
While Jonathan Hopper, managing director of Garrington Property Finders, pointed out that the flurry of momentum seen in late Spring has petered out and there is now a sense of awkward inertia in which neither sellers nor buyers can second guess what’s coming next and this has slowed the number of sales sharply.
‘There may soon come a tipping point where Brexit uncertainty finally becomes a trigger for the committed but cautious buyers who have been holding off in the hope that the clouds over Britain’s economic future would part. With the likelihood of Brexit happening, come what may, by the end of October some tactical buyers sense that these final few months of sluggish calm could be the time to strike,’ he explained.
He said that in weaker markets, such as London and the Southeast, homes are selling for as much as 30% below original guide price, while in areas starved of supply, good homes are selling fast and some buyers are even paying over guide price for the most sought after properties.
‘Such regional polarisation illustrates just how the market as a whole is resting on a knife edge. The next 12 weeks should clarify whether Britain’s economic prospects get very good or very bad, very quickly,’ he added.