Figures released by Halifax show annual growth in house prices for June at 1.8% were slower than the 1.9% seen in May. The annual rate of growth has been relatively slow since the start of the year. In terms of month on month variations, we saw a 0.3% rise in June to an average price of £225,654, although this is down 0.7% for the quarter.
Halifax MD Russell Galley observed, “Activity levels, like house price growth, have softened compared with the final months of last year. Mortgage approvals have been in the low range of 63,000 to 67,000 since the start of the year, whilst home sales have remained flat so far this year.”
The results from Halifax reflect what we (as agents) have witnessed on the ground. So far this year we have seen significantly less activity compared to the end of 2017. This is measured by fewer applicants per property listed and more price sensitive buyers and renters. The outcome is tougher negotiations and slightly longer periods from listing to final sale.
This is not something we are concerned about; with fewer properties coming to market than applicants looking for a home, house prices will continue to rise, perhaps more steadily than in recent years. However, the rate of growth we saw over the last two years in Altrincham at around 9% pa was surely unsustainable! Meanwhile, for the first three months of this year we have seen average house prices increase by just 2.8%.
Other economic factors remain strong, suggesting house prices will continue to rise steadily. The job market is strong; mortgage rates are low; the lack of stock on the market has bolstered prices. Russell Quirk, CEO of Emoov, stated: “Property values are still up annually while supply levels remain subdued and continue to be exceeded by buyer demand as a result of mortgage affordability. These are not the ingredients for a market crash.”