House prices remained “broadly flat” in June, edging up by 0.3% month-on-month, Halifax has reported.
It followed a much stronger month-on-month jump of 1.7% in May, which came after a 3.1% decrease in April.
Across the UK, the annual pace of house price growth slowed to 1.8% in June, from 1.9% in May, taking the average property value to £225,654.
On a quarterly basis, prices were 0.7% lower between April and June than than they were between January and March. Halifax said the quarterly figure “appears to be a symptom of the monthly volatility”.
Russell Galley, managing director, Halifax, said: “House prices continue to remain broadly flat, with the annual rate of growth marginally slowing from 1.9% in May to 1.8% in June.
“Activity levels, like house price growth, have softened compared with the final months of last year.
“Mortgage approvals have been in the low range of 63,000 to 67,000 since the start of the year, whilst home sales have remained flat so far this year.
“This is in contrast to the continuing strength of the UK jobs market, with job creation still strong and pressure on household finances easing as real income growth edges up.”
He said that, at the halfway stage of 2018, the annual rate of house price growth is within Halifax’s forecasts of 0% to 3%.
Mr Galley continued: “We continue to see very positive factors of continuing low mortgage rates, great affordability levels and a robust labour market.
“The continuing shortage of properties for sale should also continue to support price growth.”
Mike Scott, chief property analyst at estate agent Yopa, pointed out that house prices are now sitting at similar levels to those seen in October 2017, when Halifax said the average house price was £225,664.
He said: “We agree with Halifax’s overall assessment that the market will continue to rise slowly for the rest of the year.”
Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors (Rics), said: “Once again, we are seeing a market in subdued mode supported broadly for some time by low interest rates and unemployment, as well as more specifically by low stock.”
He continued: “On the ground, we have reached the limit of what many buyers can afford so this is not a correction, more a realignment of prices to reflect changes in circumstances and to address the potential stand-off between buyer and seller.”
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “Halifax’s house prices index now has fallen for two consecutive quarters – by 0.1% and 0.7% quarter-on-quarter in quarter one and quarter two, respectively – and the trend likely won’t improve soon.”
Mr Tombs said that while scope for average mortgage sizes to increase is limited: “We doubt that a sustained period of falling house prices is imminent, given that the labour market still is robust and the recent cut to stamp duty for most first-time buyers has offset some of the hit to affordability from rising mortgage rates.
“As a result, a further period of broadly flat house prices remains likely.”
Howard Archer, chief economic adviser, EY ITEM Club, said: “Housing market activity is still lacklustre and finding it hard to really gain traction amid challenging conditions. We continue to suspect that any meaningful housing market upturn will remain elusive over the coming months.
“We expect house price gains over 2018 will be limited to a modest 2%. At this stage, we expect prices to rise no more than 3% in 2019.”
Source: Yahoo Finance UK