Mortgages  

Annual house price growth eases to 6.9%

Annual house price growth eases to 6.9%

Halifax has reported house prices in the three months to August were 6.9 per cent higher than in the same three months of 2015, while house prices in the three months June to August were just 0.7 per cent higher than in the preceding three months.

The lender reported that the average UK house was now worth £213,930.

Martin Ellis, Halifax’s housing economist, said: “House prices in the three months to August were 0.7 per cent higher than in the previous quarter; down from 1.5 per cent in July.

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“The annual rate of growth fell from 8.4 per cent in July to 6.9 per cent.

“The slowdown in the rate of house price growth is consistent with the forecast that we made at the end of 2015. Increasing difficulties in purchasing a home as house prices continued to increase more quickly than earnings were expected to constrain demand, curbing house price growth.”

The Halifax measure of house prices fell 0.2 per cent month-to-month in August, marginally below the consensus, minus 0.1 per cent.

“The three-month average of year-over-year growth in prices declined to 6.9 per cent in August from 8.4 per cent in July, slightly below the consensus, 7 per cent.”

The further drop in the Halifax measure of house prices in August, following its 1.1 per cent month-to-month decline in July, demonstrates that the Brexit vote has scarred demand.

The Halifax index strikes a very different tone to Nationwide’s measure, which has shown steady month-to-month gains averaging 0.5 per cent over the past three months.

The Halifax measure, however, sits comfortably alongside surveyors’ reports of falling prices and the sharp decline in the average mortgage approval value to £171,000 in July, from a peak of £184,000 in January.

Richard Perry, senior consultant at Hawkstone FS, said: “This change is all down to Brexit, but we’re not concerned.

“These figures are taken from June to September so it is over the summer holidays. Everybody panics over summer – it would be better to look at the index 12 months after Brexit for more accuracy about house price growth, but for now, positive thinking is important.”