9th July 2014
House prices have risen in 8.8% in the 12 months to June, up from 8.7% in May according to the latest Halifax house price index.
However prices are declining on a monthly basis, falling by 0.6% between May and June the fourth monthly fall since last December. In terms of the last quarter, prices rose by 2.3% in the three months to June.
The average house price across the UK is now £183,462 according to Halifax.
Stephen Noakes, Halifax’s mortgage director said: “Housing demand continues to be supported by an economic recovery that is gathering pace, with employment levels growing and rising consumer confidence, although real earnings growth remains sluggish.”
Last week, the Nationwide Building Society said prices had risen by 11.8% in the last year, and were now higher than at the peak of the market in 2007.
Experts believe that new affordability rules due to be beefed up further in September could finally restrain the market.
Jonathan Samuels, chief executive of Dragonfly Property Finance says: “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.
“With interest rate rises now very much on the cards, mortgage approvals dropping and wage growth still negligible, the property market looks set to plateau in the near term.
“As ever, prices in some areas of the UK are such that buyers need to be vigilant. This market could catch the unwary out.”