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June sees ‘surprise’ uptick in house prices

  • 07/07/2016
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June sees ‘surprise’ uptick in house prices
Average house prices increased by 1.3% in June, but the real indicator of the market following the Brexit vote will be July's figures, industry experts say.

Both annual and quarterly house price growth saw significant rises to 8.4% and 1.2%, respectively, bringing the average UK property price to £216,823.

But Halifax noted that annual house price growth was lower than a month earlier when it reached 9.2%, demonstrating that the underlying pace of house price growth could be easing. The lender added that it was ‘too early’ to determine any impact since the UK voted to leave the European Union on 23 June.

Mark Posniak, managing director of Dragonfly Property Finance, said the only certainty was that the market will experience a degree of volatility in the months ahead.

“The June uptick in prices was a surprise but on a quarterly and annual basis there has been a moderation in price growth, and this is a much better reflection of where the market is at.

“Few will pay much attention to the June price rise. What matters is where the market goes from July onwards and that’s the great unknown,” he added.

“With the high level of political, economic and market uncertainty at present, it’s hard to know where the property market is headed.”

Mortgage approvals also grew steadily in May by 1.3%, but were still 6% lower in the three months to May than the preceding three months. The introduction of the 3% Stamp Duty premium for second home owners in April has had a huge impact on house sales in recent months. A rush to complete sales ahead of the tax change caused a sharp rise in March, which was followed by a substantial decline in April. UK home sales stabilised in May, rising by just 1.5%. Sales of 89,700 in the month, however, remained 16% below the average over the six months to February.

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