Halifax: small July rise in house prices

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Halifax has reported that house prices increases by 0.4% in July to add £1,122 to the cost of the average property.

The average price of a home in July was £261,221.

Annual price growth fell to +7.6%, its lowest level since March.

Russell Galley, managing director, Halifax, said: “This easing was somewhat expected given the strength of price inflation seen last summer, as the market began its recovery from the first lockdown, and with activity supported by the start of the stamp duty holiday. In cash terms, typical prices now stand at just over £261,000, a little below May’s peak but still more than £18,500 higher than a year ago.

“Recent months have been characterised by historically high volumes of buyer activity, with June the busiest month for mortgage completions since 2008. This has been fueled both by the ‘race for space’ and the time-limited stamp duty break. With the latter now entering its final stages (the zero percent rate only applies to the first £250,000 of the purchase price, before reverting back to standard rates from October), buyer activity should continue to ease over the coming months, and a steadier period for the market may lie ahead.

“Latest industry figures show instructions for sale are falling and estate agents are experiencing a drop in their available stock. This general lack of supply should help to support prices in the near-term, as will the exceptionally low cost of borrowing and continued strong customer demand.

“Although there remains some uncertainty over the impact on employment from the unwinding of government support schemes, on balance the risks to the macro-environment are receding, with consumer confidence improving, the labour market recovering, and the economy expanding as restrictions are lifted.

“Overall, assuming a continuation of recent economic trends, we expect the housing market to remain solid over the next few months, with annual price growth continuing to slow but remaining well into positive territory by the end of the year.”

Guy Harrington, CEO of Glenhawk, added: “Despite flickering, and frankly welcome signs, that the fuel igniting the market may be running low, house prices continue to demonstrate a complete disconnect from economic reality.

“Only once the pandemic fallout picture becomes clear, with government stimulus fully withdrawn, and people start returning to the office en masse, will the read across to the housing market become meaningful. 2022 still looks more likely to see a correction of sorts than not.”

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