ASKING prices for UK homes fell in June as continuing political uncertainty weighted on the market, according to research conducted by property website Rightmove.
Rightmove data is based on property advertised between May 14 and June 10 this year, covering mostly the final weeks before the General Election.
It found that the average asking price for homes in England and Wales dropped by 0.4 per cent or £1,172 in June, the first time it has fallen in this month since 2009.
This means the annual rate of growth slowed to 1.8 per cent – the smallest since April 2013.
Prices in most UK regions rose, but a 2.4 per cent drop in London together with smaller declines in southeastern England and the West Midlands dragged down the overall average.
“The price of property coming to the market had increased in June in every year since 2009, so buyers’ confidence has clearly been affected by inflation outstripping their pay packets and current political events,” Rightmove director Miles Shipside said.
But Shipside insisted that demand was still strong, especially among first-time buyers “aided by the cheap cost of borrowing”.
Despite the decline in asking prices, the number of agreed sales increased by 7 per cent compared to the same month last year, and the highest seen in May for 10 years with the exception of 2014.
What do the other house price indexes say?
Rightmove data comes as other house price measures have also shown prices dropping since Britain voted for Brexit almost a year ago.
Mortgage lender Nationwide reported three successive monthly falls in house prices for the first time since 2009 – the peak of the financial crisis.
Prices fell 0.2 per cent in May, 0.4 per cent in April, and 0.3 per cent in March.
Robert Gardner, Nationwide’s chief economist, said that the figures provide further evidence that the housing market is “losing momentum”.
Rival bank Halifax said house price growth slipped to a four-year low in May.
It reported property values rose by 3.3 per cent annually in May, which was lower than April’s 3.8 per cent, and also the weakest annual rate of growth since May 2013.
How to get help buying a house
THERE are several government schemes available to help you get on the housing ladder.
- Help to Buy loan: This scheme is for those who have a 5 per cent deposit, and is only available on new-build properties that are worth less than £600,000. The government lends you up to 20 per cent of the property value (interest-free for the first five years) which gives you access to cheaper mortgages. You will need to pay this back at the end of the mortgage or when you sell.
- Starter Homes: First-time buyers under the age of 40 can access this new scheme. You’ll get a 20 per cent discount on the market value of the property (new-build only) but you cannot sell or let the property for five years after you buy it.
- Shared ownership: This scheme is available to non-homeowners who earn £80,000 a year or less (£90,000 in London). People can buy a share of a home from a housing association and continue to rent the remainder. Buyers will need a ten per cent deposit as well as money to cover stamp duty and other fees. You’ll also need to find a mortgage lender that is willing to lend on shared ownership properties
While data from the Office for National Statistics (ONS) contradicted those figures, it found that house prices rose by 5.6 per cent in the year to April, up from a 4.5 per cent gain in the previous month.
The ONS however also acknowledged that the market might be running out of steam.
“There has been a general slowdown in the annual growth rate since mid-2016,” the ONS said.
Are we heading for a house price crash?
No. We are seeing a slight slump in growth of prices – but nowhere near the falls experienced during the financial crisis in 2008.
House prices fell by 15.9 per cent in 2008, according to a report by Nationwide building society at the time.
But, Russell Quirk, founder and CEO of eMoov.co.uk, said today’s data does show how house prices can be affected by political turmoil.
He said: “Unfortunately, stability was the last thing we received at the start of the month and so not only will this period of uncertainty now be prolonged, but it is likely the market will continue to splutter where price growth is concerned,” he said.
“That said, it is probably unfair to be drawing comparisons to the market during the peak of the credit crunch as we are in a much steadier climate then compared to now.
Although he expects price growth to stay stagnant for the rest of the year, he added that it is unlikely we will see any “notable dips”.
Rightmove director Miles Shipside said the usual slower market in the second half of the year seems to be one of “the few certainties in 2017”.
Asking prices for British homes across the UK
THE average house prices across the UK in June 2017, and the monthly increase in property value from the previous month.
- North East, £151,997, monthly change 0.7 per cent
- North West, £188,313, monthly change 1.3 per cent
- West Midlands, £216,937, monthly change -0.8 per cent
- Wales, £184,308, monthly change 0.8 per cent
- South West, £312,764, monthly change 1.2 per cent
- South East, £422,901, monthly change -0.9 per cent
- Greater London, £634,321, monthly change -2.4 per cent
- East of England, £351,276, monthly change 0.6 per cent
- East Midlands, £208,127, monthly change 1.3 per cent
- Yorkshire and Humber, £183,679,monthly change 1.7 per cent
But added that demand is still high and markets in some parts of the country seem to be getting used to “coping with instability” and are still strong.
Kevin Shaw, national sales director at estate agency Leaders, said it’s very much “business as usual” for the property market.
“Whilst some people may be adopting a wait and see approach, many more are wanting – or needing – to press on with their property transactions,” Shaw said.
“We have, however, started to see a slight hardening of attitude from buyers so sellers need to have realistic expectations and be prepared to be flexible in negotiations,” he added.
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