6th August 2015
Annual house price growth slowed during July following a spike in June although Halifax claims the underlying pace remains strong.
According to the lender prices firmed by 7.9% in July down from 9.6% in the previous month, while house prices fell by 0.6% month-on-month, taking the average UK property value back to £198,883.
Stephen Noakes, managing director, retail customer products said: “The underlying pace of house price growth remains robust notwithstanding the easing in July. Continuing economic recovery, earnings growth in excess of consumer price inflation and very low mortgage rates all underpin housing demand.
“Supply is highly restricted with the stock of homes available for sale falling further to new record lows. This combination of well-supported demand and tight supply is likely to ensure that house price growth remains relatively strong in the near-term.”
Howard Archer, chief UK and European economist at IHS Global Insight highlighted that the Halifax data has been notably more volatile than other house price measures in recent months and stronger overall than most.
“Indeed, despite July’s retreat, annual house price inflation on the Halifax’s measure at 7.9% in the three months to July is still more than double the Nationwide’s rate of 3.5% in July. This highlights the need to not pin too much weight on one particular house price survey or measure but to try and take an overall view from the data,” he added.
Taking an overall view of house prices based on the various surveys, Archer’s current forecast is for house prices to rise by 6% over 2015, falling to around 5% in 2016.
Archer said: “Latest data and survey evidence largely indicate that housing market activity is on the up, and we suspect it will continue to improve amid generally supportive fundamentals, notably including strengthening earnings growth, higher employment, elevated consumer confidence and very low mortgage interest rates. Meanwhile, a shortage of properties coming on to the market is currently exerting increasing upward pressure on house prices.”