The annual rate of house price inflation slowed to 2.1 per cent in July – down from 2.6 per cent in June and the lowest rate since April 2013, according to the latest Halifax House Price Index.
A 0.2 per cent drop in the three months to July marked the fourth successive quarter in which prices have fallen – the first time such a trend has been witnessed since 2012.
But the 0.4 per cent monthly rate of growth was the best since December 2016, helping to reverse the previous month’s 0.9 per cent decline.
The average UK house price in July was £219,266, according to Halifax.
A number of recent indicators have pointed to a slowdown in the market, with the Bank of England reporting a 0.7 per cent fall in the volume of mortgage approvals for house purchases between May and June, and the Royal Institution of Chartered Surveyors stating that average stock levels on estate agents’ books hit an all-time low in June.
Nationwide’s latest house price index indicated a broadly flat market, with prices being supported by a lack of available homes.
Russell Galley, managing director at the Halifax Community Bank, said a rise in employment in the three months to May had not boosted wage growth, resulting in earnings rising at a slower rate than consumer prices.
He 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.
“However, a continued low mortgage rate environment, combined with an ongoing shortage of properties for sale, should help continue to support house prices over the coming months.”
Jonathan Hopper, managing director of Garrington Property Finders, commented: “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.
“The speed of price growth has slowed substantially, and at a national level average prices are still flatlining rather than falling.
“But what growth there is is meandering and listless, with prices being propped up by record low levels of supply.”