halifax hpi

 

Halifax have released their House Price Index for July.  House prices in the three months to July 2016 were 1.6% higher than in the three months to April 2016.  Annual house price growth unchanged at 8.4%

  • Prices in the three months to July were 8.4% higher than in the same three months of 2015
  • House prices in the last three months (May-July) were 1.6% higher than in the preceding three months

Martin Ellis, Halifax housing economist, said:

“House prices in the three months to July were 1.6% higher than in the previous quarter; up from 1.1% in June but comfortably lower than earlier in the year. The annual rate of growth was unchanged at 8.4%; the lowest since July 2015.

“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.”

House Prices

  • House prices in the three months to July were 1.6% higher than in the preceding three months (FebruaryApril). This was above June’s 1.1% increase and similar to the rates recorded in April and May (both 1.5%), but significantly lower than in February and March.
  • Prices in the three months to July were 8.4% higher than in the same three months a year earlier. This annual rate was unchanged from June, at the lowest since July 2015 (7.8%).
  • House prices declined by 1.0% between June and July. This largely offset the 1.2% increase in June. The month-on-month changes can be erratic and monthly falls often occur within an upward trend. This was the third monthly fall so far this year and was smaller than February’s decline (-1.5%). The quarter on quarter change is a more reliable indicator of the underlying trend. 

Housing Activity

  • Home sales continued to improve in June. Sales have been heavily distorted in recent months by the introduction of higher stamp duty tax rates for buy to let and second home purchases in April. A rush to complete sales ahead of the tax change caused a sharp rise in March, which was followed by a substantial decline in April. UK home sales continued to recover in June with a 5% increase compared with May. Overall, sales in the first half of 2016 were 11% higher than in the same period last year. (Source: HMRC, seasonally-adjusted figures)
  • Mortgage approvals fell slightly in June. The stamp duty change has also affected mortgage approvals in recent months. The volume of mortgage approvals for house purchases – a leading indicator of completed house sales – declined by 3% between May and June. Approvals in the three months to June were 9% lower than in the first three months of 2016. Nonetheless, approvals in the first six months of 2016 were 8% higher than in the first half of 2015. (Source: Bank of England, seasonally-adjusted figures)
  • Stock of homes for sale remains very low. New instructions by home sellers fell for the fourth month in a row in June. This contributed to a fall in the stock of homes available for sales, which remains close to a record low. (Source: Royal Institution of Chartered Surveyors’ (RICS) monthly report)

 

Rob Weaver, Director of Investments at property crowdfunding platform Property Partner, comments:

“The monthly fluctuations paint a contrasting picture with July’s fall cancelling out June’s rise. For example, there was a much bigger monthly fall back in February, just before the stamp duty hike supercharged the market.

“In 2016 we’ve had the stamp duty stampede, followed by the Brexit shock and now the base rate cut – but barring further external shocks, the market should find its new normal, putting an end to this yo-yo effect.”  

“Despite house price inflation slowing down, the more robust quarterly and annual rates are still ticking along, underpinned by the acute supply shortage.”

“Thursday’s interest rate cut could act to spur demand. With sellers being more realistic on asking prices, and mortgage rates heading even lower, buyers are in the driving seat.”

 

The following comments are from Ben Madden, managing director of London estate agents Thorgills

“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.”

“You would expect August to remain fairly quiet, for the usual seasonal reasons, but short of an economic or stockmarket Black Swan event, a rise in transactions in the autumn is likely.”

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