Annual house price growth remains unchanged, says Halifax

House prices fell by 1% in June but are still 8.4% higher than a year ago, pointing to a slowdown in house price growth.

UK house prices have gone up by an average of 8.4% in the last year to £214,678, according to the latest Halifax house price index.

Prices in the three months to the end of July went up by 8.4% compared to the same three months in 2015 and were 1.6% higher than the previous quarter, from February to the end of April 2016.

The quarterly increase beat the one seen last month, June, which saw a 1.1% rise and was similar to the quarterly rise seen in April and May, at 1.5% but lower than the levels recorded in February and March.

Martin Ellis, Halifax housing economist, says: "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.

On a monthly basis house prices actually fell by 1.0% between June and July, after rising by 1.2% in June. However, Halifax said the quarterly change is a more reliable indicator of the underlying trend.

“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.” said Ellis.

Last week, the Bank of England cut interest rates for the first time since March 2009, to a new record low of 0.25% and also suggested that house prices could fall.

First-time buyers

Halifax also revealed that the number of first-time buyers rose by an estimated 10% in the first six months of 2016, compared with the same period in 2015. In its first-time buyer review, Halifax said there was an estimated 154,200, first-time buyers in the first half of 2016, compared to 140,500 in the first half of 2015. This is more than double the lowest levels seen in the first six months of 2009, 72,700, though still almost 20% lower than in the first half of 2006.

House sales

Property sales continued to recover following the distortions in earlier months caused by the rush to complete sales ahead of the introduction of higher stamp duty tax rates for buy to let and second home purchases in April. Sales were up 5% on May and overall house sales are 11% higher in the first six months of 2016 compared to the same period last year.

Mortgage approvals

Mortgage approvals dipped slightly in June, down 3% from May. Mortgage approvals in the quarter ending in June were 9% lower than in the first three months of 2016, again affected by the stamp duty changes, but the first six months of 2016 saw an 8% increase in mortgage approvals compared to the same period in 2015.

Stock of homes for sale

The indicator for stock levels of homes for sale remain close to a record low, Halifax said, with new instructions by home sellers falling for the 4th month in a row in June.