UK house price growth eases for third month in row
UK house price growth softened for a third consecutive month, according to official figures published on Tuesday, as the market slips on political and economic uncertainty.
Based on completed home sales, prices rose 4.9% in June from the same month last year, the Office of National Statistics/Land Registry revealed, down from the 5% in May and 5.1% in April and a recent peak of 8.2% in June last year but better than the consensus estimate from economists of 4.3%.
On a monthly basis, prices in June were up 0.8% compared to May.
The ONS measure of house price inflation lags behind many of the other measures as it is based on mortgage completions.
It is also subject to major revisions, pointed out Howard Archer, chief economic advisor to the EY ITEM Club, noting that annual house price inflation are lower, standing at 2.1% in the three months to July on the Halifax measure -- the lowest rate since the three months to April 2013 -- and 2.9% in July according to Nationwide.
“Housing market activity is currently lacklustre amid weakened consumer fundamentals. The latest data from the Bank of England (BoE) show that mortgage approvals for house purchases slowed to a nine-month low in June,” Archer said.
“House prices look unlikely to rise by more than 2% over 2017 and could well be essentially flat over 2018.
“The fundamentals for house buyers are likely to remain weak over the coming months with consumers’ purchasing power continuing to be squeezed by inflation running higher than earnings growth. Additionally, housing market activity is likely to be hampered by weakened consumer confidence and limited willingness to engage in major transactions."
Word on the ground, from north London estate agent Jeremy Leaf, a former RICS residential chairman, was that the Land Registry figures: "show a fairly stable market at a time when we might have expected more nervousness among buyers and sellers.
"What we are seeing on the ground is a determination to get on with property transactions even if that means negotiating harder to make sure they go through."