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House prices slip back in June – Halifax

  • 09/07/2014
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House prices fell back in June but remain significantly higher than a year ago, new data released by Halifax has shown.

The bank’s latest house price index found house prices fell by 0.6% between May and June, with the current UK average now standing at £183,462.

This was the fourth monthly price fall since December.

However the lender stressed any change in prices month-on-month must be considered as part of a wider trend. Prices in the three months to June were still 8.8% higher than the same period a year ago.

Prices in the three months between April and June were also 2.3% up on the preceding three months.

Rob Wood, chief UK economist at Berenberg Bank, said: “Strong economic background and a supply shortage should continue to support house price inflation. Leading indicators remain strong, while the BoE’s intention to hike interest rates gradually means borrowing costs will remain supportive for several years.

“The BoE will move only gradually against house prices. The BoE has shown a high tolerance for house price inflation. They seem content to allow prices to rise 20% over the next two-and-a-half years, forecasting that such an increase would not result in a dangerous debt build up.

“Still, the BoE began taking gradual action on house prices last month, by capping loan-to-income ratios and we expect more to follow, starting with further reining in the government’s Help-to-Buy mortgage guarantee scheme in September.”

Jonathan Samuels, chief executive of Dragonfly Property Finance, said: “Despite a slight dip in June, the overall trend of prices, reflected in the quarterly figure, is up. The momentum in the property market is still there. But how long will it last?

“We have already seen that mortgage approval levels are dropping, and this is likely to continue as the new lending regime continues to embed.

“I would expect house prices overall to flatten off during the rest of the year. In certain areas of the country, especially London and the South East, this is surely a good thing.”

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