You are here: Home - News -

House prices drop for first time since January – Halifax

  • 07/07/2021
  • 0
House prices drop for first time since January – Halifax
The average UK house price fell by 0.5 per cent in June, the first fall month-on-month since January as the stamp duty holiday came to an end.


According to Halifax’s latest House Price Index, between May and June the average house price fell by £1,284 to £260,358.

Annual house price inflation was pegged at 8.8 per cent, which is down from the 14-year high in May of 9.6 per cent.

However, despite the moderate month-on-month decrease average prices in June were around £21,000 above figures from the same period last year.

All regions reported annual house price growth, but growth rates for Greater London and South of England remained more muted at 2.9 per cent and 7 per cent respectively.

Wales reported the largest annual house price growth with 12 per cent, the highest since 2005. This was followed by Northern Ireland and the North West with 11.5 per cent.

The lender said the Northern Ireland and Scotland’s annual house prices were the highest recorded since 2007, whilst for the North West and Yorkshire inflation was the greatest since 2005.

The monthly fall was partially attributed to the stamp duty holiday being phased out. But Halifax’s managing director Russell Galley said that demand is expected to remain high which would sustain average house prices.

“That power of homemovers to drive the market, as people look to find properties with more space spurred on by increased time spent at home during the pandemic, won’t fade entirely as the economy recovers,” he said. “Coupled with buyers chasing the relatively small number of available properties, and continued low borrowing rates, it’s a trend which can sustain high average prices for some time to come.”

However, he added that he expected annual growth to slow somewhat by the end of the year as unemployment increased when government measures were rolled back and buyer demand decreased.

SPI Capital’s chief executive officer Anna Clare Harper said: “Housing transactions and prices were egged on by the temporary stamp duty reduction, which was designed to boost the housing market and confidence through the pandemic, as well as lockdown-led upsizing and a flight to safer assets, alongside ongoing low interest rates. The tapering down of the temporary stamp duty reduction takes the pressure off demand.”

She continued that constrained supply and challenges in construction would mean property owners were less likely to sell, which would consequently fuel the long-term trend of house prices rising faster that most people’s wages.

MT Finance’s property lender director Tomer Aboody said: “Although June saw a slight downward trend in price growth, demand from buyers has never been higher. The full stamp duty break may be over now but some further relief is still available until October, which will keep fuelling the market.”

Former RICS residential chairman Jeremy Leaf said: “There is still some strength in the market despite the beginning of the end to the stamp duty holiday and slightly reduced demand and softening prices.

“We don’t expect this new balance between supply and demand to change much over the next few months, particularly if economic growth can make up for the ending of the furlough scheme.”

There are 0 Comment(s)

You may also be interested in