U.K. house prices for July fell to 7.9 percent, lower than the previous month's 9.6 percent. Despite the drop, Halifax still foresees a "robust" rise in house price growth.
According to Reuters, Halifax said Thursday that the country's year-on-year house price growth for July has slowed in the past three months and the slowest since December. The country's largest mortgage lender stated that for July alone, house prices fell by 0.6 percent from June, when it previously jumped by 1.6 percent. Despite the slow pace of home prices, the housing market is being supported by rising wages and high demand albeit low supply of homes.
Stephen Noakes, Halifax's managing director for retail customer products, said: "Demand was supported by above-inflation growth in earnings and low mortgage interest rates while a shortage of properties on the market would also help to push up prices." Noakes also added that the "pace of house price growth remains robust" despite the July figures.
Henry Pryor, an independent buyer, attributed the slowdown of the U.K. home prices to the policies released by the Bank of England, to address the "boom and bust" of the market, reports the Telegraph. Last year, the central bank tightened policies on lending particularly in the London and South East areas. An increase in interest rates is also being considered to help "cool" the market further. Despite these initiatives, Pryor warns that the "warning light is still flashing on the Bank of England's dashboard." He explained that the increasing number of buyers closing their transactions in cash will continue to inflate prices in the long run. This will make it harder for first time home buyers with a mortgage, and adequate deposit, to get on the ladder, stated Pryor.
Meanwhile, Halifax's data are in contrast with the figures released by Nationwide earlier this week, stated BBC. The building society said that the rate of house price growth rose to 3.5 percent in July, from June's 3.3 percent. Howard Archer, chief UK economist with IHS Global Insight, said the differences between the two served as a warning against reading too much into any one survey. "This highlights the need to not pin too much weight on one particular house price survey or measure, but to try and take an overall view from the data," Archer said.
Both Halifax and Nationwide get their data from mortgage approvals, but use a different "mix-adjustment" in their methodology. This involves a different weighting of the figures, states BBC, to reflect different types of property being sold in any month, and more sales in a particular region of the UK.
