UK house prices slow as lending rules are tightened
Monthly property prices in Great Britain were unchanged in June in a further sign that the market may be slowing down, avoiding a housing bubble.
The latest official figures from the Land Registry found that while average prices over the year lifted 6.4% to £172,011, monthly prices were flat on May.
Analysts are likely to take this as evidence that tighter lending measures, such as April's Mortgage Market Review and new rules in June from the Bank of England, are beginning to cool the market.
Land Registry data showed that seven out of 10 regions recorded month-on-month house price falls, with only London, the South East and the West Midlands rising.
The area with the greatest monthly rise was the West Midlands with a 1.9% lift, while the region with the largest fall was Yorkshire & Humberside with a 1.3% decline. In London, which has been driving the housing market since the financial crisis, house prices only edged up 0.1%.
The national monthly average, however, was unchanged.
Jeremy Duncombe, director of Legal & General Mortgage Club, said: "These figures show that the breakneck pace of the housing market set in certain parts of the UK is starting to ease off. The aim needs to be for the market to be sustainable over the long-term, and steady price increases broadly in line with inflation is a far healthier state of affairs."
The British Bankers' Association has also reported a drop in mortgage approvals, seen as an indicator of future sales.
The Mortgage Market Review introduced strict affordability tests on borrowers in April. Under measures introduced two months later, lenders must ensure no more than 15% of new mortgages are given to people borrowing more than 4.5 times their income.
Lenders will also have to stress test borrowers' ability to repay loans if their mortgage rate were 3% higher than the rate at the time the loan was approved.