House prices rise but only just, as property market feels spending power squeeze
Halifax’s monthly index showed that prices rose 0.4% in July.
House prices eked out growth last month but deflated wages and the squeeze on spending power continue to take their toll on the country’s property market.
Halifax’s monthly index showed that prices rose 0.4% in July, a bounce back from the 0.9% decline recorded in June.
Prices in the three months to July were 2.1% higher than in the same three months last year, but this was down from 2.6% in June and is the lowest annual rate of growth since April 2013.
Over the last three months house prices were 0.2% lower than in the previous 12 weeks and represent the fourth successive quarterly fall, the first time this has happened since November 2012.
Russell Galley, managing director at Halifax Community Bank, said: “House prices continue to remain broadly flat, as they have since the start of the year.
“Improvement in the jobs market has not, as yet, boosted wage growth, resulting in earnings rising at a slower rate than consumer prices.
“This squeeze on spending power, together with the impact on property transactions of the stamp duty changes in 2016 now being realised, along with affordability concerns, appear to have contributed to weaker housing demand.”
Across the UK, the average house price stood at £219,266 in July. This is £64,603 or 42% higher than a low point seen in April 2009.
Annual house price growth is now running at just under a quarter of the levels seen in March 2016, when property values were increasing by 10% year on year.
Mr Galley added that a continued low mortgage rate environment, combined with an ongoing shortage of properties for sale, should “help continue to support house prices over the coming months”.