UK annual house price growth hits 4-year low

Annual house price growth has slowed to the lowest rate in four years, according to Britain’s biggest mortgage lender.

Despite the slowdown, Halifax, which is owned by Lloyds Banking Group, said house price growth was still underpinned by low mortgage rates and a shortage of homes for sale, which have countered falling household incomes. The average price of a home rose to £219,266 in July, up 0.4% from June.

The monthly rise partially offset the 0.9% drop recorded in June, but prices were still down 0.2% in the last three months. This was the fourth consecutive quarter of price declines, the first time this has happened since November 2012.

The annual rate is the lowest since April 2013, with house prices in the three months to July up 2.1% from a year earlier. Annual house price growth has declined from a peak of 10% in March 2016.

Russell Galley, the managing director of Halifax Community Bank, said: “House prices continue to remain broadly flat, as they have since the start of the year.”

He noted that rising employment levels had pushed the unemployment rate down to 4.5%, the lowest since 1975. “However, this improvement in the jobs market has not, as yet, boosted wage growth, resulting in earnings rising at a slower rate than consumer prices,” Galley added.

“This squeeze on spending power, together with the impact on property transactions of the stamp duty changes in 2016 now being realised, along with affordability concerns, appear to have contributed to weaker housing demand.”

Experts point to the declining number of sales as evidence of a cooling market. They fell 3% between May and June to 96,910, the lowest level since October 2016, according to HMRC data.

A rival house price index from Nationwide, the UK’s biggest building society, painted a similar picture. It recorded a 0.3% monthly increase in July, while the annualised growth figure dropped to 2.9%. Nationwide reported monthly house price declines for March, April and May but June and July saw prices rise again.

The housing market has surprised some economists with its resilience at a time of political uncertainty, rising inflation and stagnating or falling wages. Both Halifax and Nationwide say a lack of homes on the market will continue to support house prices in coming months.

The post UK annual house price growth hits 4-year low appeared first on Currency News Trading.

Source: New feed 2

Leave a Reply

Your email address will not be published. Required fields are marked *