UK house prices are ‘back on the rise again’

UK house price growth may be easing, according to the latest Halifax data, but it has been suggested that there are signs emerging that property price rises are set to pick up pace once more.

According to Britain’s largest mortgage lender, annual house price growth has slowed to the lowest rate in four years,

The year-on-year level of growth is the lowest since April 2013, with house prices in the three months to July up 2.1% from a year earlier, which is a major decline from the 10% annual house price increase recorded in March 2016.

The newly released figures from the Halifax, based on its own mortgage lending statistics, also reveal that house prices in the second quarter of this year were 0.2% lower than the previous quarter, which is the worst quarterly performance in almost five years.

“There was a time when four falls in a row would have set alarm bells ringing. But so far all the indications are that the market is seeing a cooling rather than a correction,” said Jonathan Hopper, managing director of Garrington Property Finders.

“The speed of price growth has slowed substantially, and at a national level average prices are still flatlining rather than falling,” he added.

Despite the recent slowdown, Halifax, which is owned by Lloyds Banking Group, said home price growth was still underpinned by low mortgage rates and a shortage of homes for sale. 

In fact, property prices actually showed signs of improvement last month, posting their best monthly rise of the year, according to Halifax.

UK house prices rose 0.4% in July after a 0.9% contraction in the previous month, the mortgage lender said.

The average price of a British home is £219,266, according to the index.

Ishaan Malhi, CEO and founder of online mortgage broker Trussle, said: “On the face of it there seems to have been a slight dip in house prices during Q2 as buyers' income continued to be squeezed, while the election will have also put some people off making big purchases. Prices are however back on the rise again now, perhaps because inflation has put less pressure on people’s pockets during the last couple of months.                                                                        

“This will come as good news to current homeowners who should be thinking about making the most of low interest rates to lock in a competitive mortgage deal, particularly for the record number that will be seeing their initial term come to an end in September and October.

“Rising house prices are of course a less rosy prospect for those still hoping to buy. Thankfully they’re not grow as fast as wages, which will help those saving for a deposit.”