Prices in the three months to July were 8.4% higher than prices over the same period last year, according to the Halifax house price index.
The number of first-time buyers increased by an estimated 10% in the first six months of 2016, compared with the same period.
Martin Ellis, Halifax housing economist, said: “House prices in the three months to July were 1.6% higher than in the previous quarter; up from 1.1% in June but comfortably lower than earlier in the year. The annual rate of growth was unchanged at 8.4%; the lowest since July 2015.
“There are signs that house price growth is slowing with a deceleration in both the annual and quarterly rates of increase in the past few months. Nonetheless, the current rates remain robust.
“July’s monthly decline largely offsets June’s increase. The month -on-month changes, however, can be erratic and falls often occur within an upward trend. Overall, it remains too early to determine if there has been any impact on the housing market as a result of June’s EU referendum result.”
The index report highlights the 3% decline in mortgage approvals in June as a result of the introduction of higher stamp duty tax rates for buy-to-let and second houses in April. Approvals in the three months to June were 9% lower than in the first three months of 2016.
Jeremy Duncombe, director at Legal & General Mortgage Club, warned about the need for vigilance over the state of the property market: “As we continue to feel the effects of the UK’s decision to leave the EU, these figures provide clear evidence that house price inflation has plateaued. The result of referendum is creating a new economic landscape, as noted by yesterday’s interest rate decision, but it’s important to remember that house prices are still rising at levels well above inflation.
“We cannot let any dampening in rising house prices lead to complacency or make us forget the fundamental problems which continue to plague the property market. There is a critical shortfall of housing stock in Britain, and if the government fails to address this burning issue, even more people will be locked out of homeownership.
“The housing minister must therefore do all in his power, including mobilising the public sector and incentivising private construction firms, to ensure that we build the thousands of new, affordable homes that are needed every year. Such a large-scale change in housing policy would be a significant step towards building a property market that is fair for all.”
Ian Thomas, co-founder and director of online property investment business LendInvest also said the government must do more to support an increase in housing supply: “Brexit has not changed the resilient foundations of the housing market. While house building numbers are up slightly according to the National House Building Council, the fact remains that we simply aren’t building anywhere near enough to meet demand.
“This lack of supply, combined with cheaper financing as a result of yesterday’s base rate cut, will continue to support house prices.
“The Prime Minister has talked about improving housebuilding, but those words need to be backed up with meaningful action. We can’t simply look to the biggest housebuilders to build us out of this crisis – more needs to be done to support developers of all sizes.”