House price growth slows but still strong

Ryan Fowler

July 7, 2016

Annual house price growth slowed to 8.4% in June, the lowest rate in a year, the Halifax House Price Index.

On a quarterly basis growth was 1.2%, the slowest since December 2014 whilst the average price of a house rose to another record high, at £216,823.

Martin Ellis, Halifax’s housing economist, said: “House prices continue to increase, albeit at a slower rate, but this precedes the EU referendum result, therefore it is far too early to determine any impact since.”

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Jeremy Leaf, a former RICS residential chairman and north London estate agent, said the increase showed that the market was stable following April’s Stamp Duty changes.

He said: “Although the Halifax report shows that house price growth is slowing, it also reveals that the market showed surprising resilience in the period immediately following the increase in Stamp Duty, leading up to the referendum.

“Despite extreme nervousness at that time as nobody knew what was going to happen, first-time buyers took advantage of opportunities left by investors bringing forward purchases to the first quarter of the year.

“The shortage of stock and fewer transactions is still continuing to underpin prices. Post-Referendum at the coalface we have found vendors and buyers willing to proceed in the face of potential adversity with a new sense of realism about the changed environment they find themselves in. Vendors who are more realistic on pricing and buyers who are prepared to be more flexible are able to do deals.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, agreed.

He said: “Swap rates have plummeted since the referendum, leading to a number of lenders slashing already-cheap mortgage rates further still. Just today, HSBC is launching the cheapest ever ten-year fix, pegged at 2.79%, for example.

“There has never been a better time to take out a fixed rate with buyers and those remortgaging who are looking for some security in these uncertain times, spoilt for choice.

“Lenders are behind on where they want to be business-wise so we expect to continue to see a flurry of attractive rates over the summer.”

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