Annual house price growth dropped again to 3.3% in the three months to May – down from 3.8% in April, Halifax’s House Price Index has revealed.
On a quarterly basis prices fell by -0.2% to stand at £220,706.
Martin Ellis, Halifax housing economist, said: “The fact that the supply of new homes and existing properties available for sale remains low, combined with historically low mortgage rates and a high employment rate, is likely to support house price levels over the coming months.”
Russell Quirk, founder and chief executive of eMoov.co.uk, reckoned what we are seeing is a pause for breath before the General Election.
He said: “The unpredictability of recent house price trends demonstrates the turbulent landscape that both the UK property market, along with the wider economy, have had to traverse over the last year or so.
“With the snap election looming imminently the recent cool in price growth seems to be thawing and it is no coincidence that one of the overarching factors in the recent price growth slowdown has been a shortage of stock, more so than usual.
“Tomorrow’s vote will be pivotal in shaping the future of the UK housing market, however, regardless of which way it goes it is likely that the sector will receive a boost from the many home sellers and buyers, who until now, will have been putting their decision on hold until the election dust has settled.”
He was echoed by Jeremy Leaf, north London estate agent and a former RICS residential chairman, who said: “Buyers and sellers have been in limbo recently with the market awaiting more certainty from the General Election and Brexit negotiations.
“However, the good news is that there is no sign of market collapse while mortgage rates remain low.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, felt the slowing housing market is resulting in a scramble to secure remortgage business from lenders.
He said: “There has been quite a bit of repricing downwards on mortgage deals in the past week, with Accord, Virgin Money, Platform, New Street and Tesco all cutting rates.
“With transaction levels in the housing market muted, the chase for volume falls on remortgages so we are seeing a number of remortgage-only products priced more keenly than their purchase equivalents, although sometimes they come with lower loan-to-values.
“Lenders are keen to lend and with the mortgage market oversupplied in all areas, pricing is likely to remain competitive for the foreseeable future.
“This is particularly good news for borrowers who are coming up to remortgage.”