Halifax has reported that house prices in July fell by 0.2% on a monthly basis.
In the latest quarter (May to July) house prices were 0.4% higher than in the preceding three months (February to April).
House prices in the three months to July were 4.1% higher than in the same three months a year earlier.
Halifax said that July’s annual change figure of 4.1% comes against the backdrop of relatively low growth in the corresponding period in 2018, which has had an impact on year-on-year comparisons.
Russell Galley, managing director at Halifax, said: “The average UK house price fell slightly for a second month, as the market continues to tread water with marginal increases or decreases in each monthly period. That said, it’s worth remembering that while economic uncertainty continues to weigh on the market, the overall trend actually remains one of comparative stability, with average prices down by less than £600 over the last three months.
“We have seen a reported drop off in the number of properties sold during the early months of summer, which may lead some to speculate a downturn is on the horizon. However, new buyer enquiries are up, and favourable mortgage affordability – driven by low interest rates and strong wage growth – should continue to underpin prices for the time being.
“In the longer-term, we believe there is unlikely to be a step change in market activity until buyers and sellers see some form of resolution to the current economic uncertainty.”
Andrew Montlake, managing director of mortgage broker, Coreco, added: “The quarterly rate of growth, at 0.4%, is the most accurate portrayal of the market, namely its head is just above water.
“Comparative stability is a fair summary, as the economic fundamentals remain strong, mortgage rates cheap and low supply is propping up house prices.
“Equally, with the odds of no-deal shortening by the day, it’s crunch time for UK bricks and mortar. The impact of no-deal on the UK property market is thick in the air.
“The consensus appears to be that the property prices will suffer if we exit the EU without a deal. But if ‘no-deal’ is more damp squib than end of the world then the property market could rediscover its mojo.
“Of course, some suspect Boris is bluffing and that a deal will still happen, which would again be a positive for the market.
“What we can be sure of is that, with so many unknowns in play, most households will sit tight during the next two to three months and transactions tail off.
“Another reason many households will sit tight in the short-term is the potential for major changes to the stamp duty regime, which could be a game changer for buyers.
“In the meantime, remortgage activity remains strong as households brace themselves for a period of potentially strong turbulence.”
