Residential property prices fell by 0.3% in June to an average of 237,110 with the market described as stable, according to the latest lender index.
The figures from the Halifax also show that prices re 5.7% higher than a year ago but managing director Russell Galley pointed out that this figure needs to be seen against the backdrop of particularly low growth in the corresponding period in 2018 which has had an impact on year on year comparisons.
‘Average house prices dipped marginally in June. This extends the largely flat trend we’ve seen over recent months. More generally the housing market is displaying a reasonable degree of resilience in the face of political and economic uncertainty,’ he said.
‘Recent industry figures show demand looking slightly more stable, with mortgage approvals ticking along just above the long-term average. One of the major restraining factors on the volume of transactions in the market continues to be the very low level of stock for sale,’ he explained.
‘With the ongoing lack of clarity around Brexit, people will be looking for more certainty in the coming months, both to encourage them to list their property and to create the confidence needed to encourage buyers. Of course, the likelihood of continued historically low mortgage rates will underpin prices in the near term,’ he added.
Director of agents Benham and Reeves, Marc von Grundherr, believes that the month on month measure can be erratic and the broader picture shows that the property market is in a considerably better position than this time last year, with a third consecutive month registering notable levels of annual price growth above 5%.
‘While the political forecast remains uncertain it’s unlikely to dampen this growing market momentum,’ he added.
Mike Scott, chief property analyst estate agent Yopa, pointed out that there is a big difference between the annual growth of 5.7% reported by the Halifax and the 0.5% annual rate of growth for June that was reported by the Nationwide last week or the 1.4% reported by the official Government index for the year to April.
‘We expect that the Halifax figure for the annual rate of house price growth will remain significantly higher than other reports until the second quarter of next year, when it will return to normal,’ he said.
‘The monthly and quarterly figures are more reliable, and confirm the price slowdown that we have seen in other reports. However they also report that demand is holding up and there is a shortage of homes for sale, so it is unlikely that national average house prices will fall significantly,’ he added.
Gareth Lewis, commercial director of property lender MT Finance, also believes it is best to be cautious about the Halifax annual figure. ‘The Halifax figures only give part of the picture because they measure values but not the volume of transactions. It flatters to deceive as we don’t have all the facts,’ he explained.
‘Unfortunately, the property market is stuck in a holding pattern, with prices not growing in real terms. Buyers and sellers are hedging their bets and demonstrating caution while they wait to see what happens on the political front. In the buy to let sector we are finding that investors are looking for bargains and will only buy at the right price,’ he added.
But, according to Jeremy Leaf, north London estate agent and a former RICS residential chairman, the figures showing a monthly dip in values are not going to encourage buyers to make a commitment while prices continue to soften.
‘It paints a confusing picture with the annual house price increase actually greater than it was last month while comparative figures from 12 months ago are also unreliable. In order to get a better feel for the market, it is always preferable to look at what is happening on the ground,’ he said.
‘We are finding that some buyers, including some investors, are looking beyond Brexit and political uncertainty and are prepared to go ahead if they can perceive value,’ he added.