House prices registered their lowest annual growth for almost three years during August, Halifax has revealed, but the lender does not seem to blame the Brexit vote.
Its latest House Price Index showed prices were 6.9% higher at £213,930, the same rate of growth as in October 2013. This compares to annual house price inflation of 8.4% in both June and July.
The annual rate of growth was 10% back in March, the index shows. On a quarterly basis prices grew 0.5%, which is the slowest rate of growth since December 2014. While many would point to the Brexit vote or Stamp Duty changes as reasons for the slowdown, Martin Ellis, housing economist for Halifax, insists the slowdown was expected. He said: “House price growth continued the trend of the past few months in August with a further moderation in both the annual and quarterly rates of increase.
There are also signs of a softening in sales activity. “The slowdown in the rate of house price growth is consistent with the forecast that we made at the end of 2015. Increasing difficulties in purchasing a home as house prices continued to increase more quickly than earnings were expected to constrain demand, curbing house price growth.”
Jonathan Hopper, managing director of Garrington Property Finders, said the numbers were reassuring. He said: “A year ago many would have regarded such a slowdown in house price rises as cause for concern. “But in today’s environment they are curiously reassuring – as they are further evidence that the post-Brexit property market is making a soft landing rather than slumping. “
House hunting traditionally takes a back seat in August, and this year the summer slowdown amplified the post-Brexit sluggishness. “With both supply and demand falling, the result is a benign stalemate – with average prices creeping up as the number of sales falls.” He claimed we are moving towards a buyer’s market, adding: “
The boldest are frequently asking for substantial discounts in return for the certainty of a sale. “Crucially, sellers have battened down the hatches rather than abandoned ship. Price growth has eased, and among the top tiers of the market, prices have returned to more genuine market levels. “The dust has yet to fully settle and Brexit concerns continue to limit both supply and demand, but prices continue to rise, albeit at more modest levels. “
It’s not yet business as usual in the property market, but as we approach the autumn market there are signs we’re getting there.”
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