House prices are up almost £5,000 in the year since the Brexit vote, figures revealed today.
A combination of record low mortgage rates and a lack of homes for sale has bolstered the property market, but the pace of house price rises has slowed considerably, according to the Halifax house price index.
House prices rose by another 0.4 per cent in July, to take the average home’s cost up a further £789 to £219,266 – up 2.1 per cent on a year ago.
House prices have continued to rise in the year since the Brexit vote at the end of June 2016, but are down on the start of 2017, Halifax’s figures show
House prices were down over the three months to July, however, Halifax said, dipping 0.2 per cent from the £220,515 reached in May.
The July house price figures mark an entire calendar year’s data since the EU referendum vote on 23 June 2016.
Despite forecasts of house price falls in the event of a Leave vote, the property market has remained above water.
However, while house prices have continued to climb the rate at which they are rising has dropped substantially – and they have fallen since the start of the year.
The average home is down £2,924 on the £222,190 peak on the Halifax index at the end of December last year.
House price inflation has fallen from 10 per cent in March 2016.
A slew of data has emerged showing a slowdown in the property market, with the Bank of England last week revealing a 9 per cent annual decline in mortgages for home purchases and the Royal Institution of Chartered Surveyors flagging falling house prices in London.
Halifax’s chart shows how the annual rate of house price inflation (the dashed line) has slowed considerably over the past year. Quarterly and monthly changes, shown in orange and yellow have mainly been between -1% and 2%
Home buyers are being aided by low mortgage rates, but are struggling with low wage growth and an inflation squeeze on their finances, said Russell Galley, managing director, Halifax Community Bank.
He said: ‘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.
‘However, 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.’
Last week, rival mortgage lender Nationwide forecast that house prices will rise by just 2 per cent this year to fall behind inflation and deliver a buyers’ market.
The building society’s economist Robert Gardner said: ‘While employment growth has remained relatively robust, household budgets are coming under pressure as wage growth is failing to keep up with the rising cost of living.’
‘This suggests that housing market activity is likely to remain subdued, with the balance in the market shifting a little further towards buyers in the quarters ahead.’