House Price Growth Drops To 3.3% - But Prices Still On The Up!

House Price Growth Drops To 3.3% - But Prices Still On The Up!

Date Published 09 June 2017

The latest data and analysis from Halifax has revealed that house prices in the three months to May were 3.3% higher than in the same period of 2016.

According to the lender, prices in the three months to May were 0.2% lower than in the preceding quarter.

Martin Ellis, Halifax housing economist, said: 'After reaching a recent peak of 10% in March 2016, the annual house price growth has since fallen to 3.3% in May.

House prices have again fallen over the past three months. Overall, prices in the three months to May were -0.2% lower than in the preceding three months; the same rate as in April. The fact that the supply of new homes and existing properties available for sale remains low, combined with historically low mortgage rates and a high employment rate, is likely to support house price levels over the coming months.'

Russell Quirk comments: 'Despite many predicting a second consecutive monthly drop in house price growth, the latest numbers by Halifax show that prices have, in fact, crept up ever so slightly during May, notwithstanding a marginal fall in the last quarter.

The unpredictability of recent house price trends demonstrates the turbulent landscape that both the UK property market, along with the wider economy, have had to traverse over the last year or so.

The recent cool in price growth seems to be thawing and it is no coincidence that one of the overarching factors in the recent price growth slowdown has been a shortage of stock, more so than usual.

The choice in new government will be pivotal in shaping the future of the UK housing market, however, regardless of which way it goes it is likely that the sector will receive a boost from the many home sellers and buyers, who until now, will have been putting their decision on hold until the election dust has settled.'

Jeremy Leaf, north London estate agent and a former RICS residential chairman, had this to say: "The Halifax figures are interesting as they reinforce findings from other recent surveys, suggesting that we should be concentrating not just on increasing supply of new homes but encouraging existing homeowners to move. Buyers and sellers have been in limbo recently with the market awaiting more certainty from the General Election and Brexit negotiations.

However, the good news is that there is no sign of market collapse while mortgage rates remain low.

Mark Harris, chief executive of mortgage broker SPF Private Clients, says: "There has been quite a bit of repricing downwards on mortgage deals in the past week, with Accord, Virgin Money, Platform, New Street and Tesco all cutting rates.

With transaction levels in the housing market muted, the chase for volume falls on remortgages so we are seeing a number of remortgage-only products priced more keenly than their purchase equivalents, although sometimes they come with lower loan-to-values. Lenders are keen to lend and with the mortgage market oversupplied in all areas, pricing is likely to remain competitive for the foreseeable future. This is particularly good news for borrowers who are coming up to remortgage."