Despite many claims of a quietening property market we seem to be continuing to be very busy with demands for both mezzanine funding and stretch funding, so what is happening to the market and house price growth?
The Halifax House Price Index for July reports an easing of annual house price growth to 2.6%. Martin Ellis, Halifax housing economist, said: “House prices have flattened over the past three months. Overall, prices in the three months to June were marginally lower than in the preceding three months. The annual rate of growth has fallen, to 2.6%; the lowest rate since May 2013.
“Although employment levels continue to rise, household finances face increasing pressure as consumer prices grow faster than wages. This, combined the new stamp duty on buy to let and second homes in 2016, appears to have weakened housing demand in recent months.
“A continued low mortgage rate environment, combined with an ongoing acute shortage of properties for sale should help continue to underpin house prices over the coming months.” According to Rightmove the average price of newly-marketed property in July is almost static, up by just 0.1 per cent, the equivalent of £312, although this is a better performance than the June figure which showed a 0.4 per cent fall.
Rightmove, in its latest monthly index, reports that the shortage of new property stock means that “prospective buyers in many parts of the country are seeing a lot of sold boards on properties they would like to buy themselves.” They say that the strength of buyer demand and lack of new build and existing property coming to market have resulted in over 45 per cent of agents’ property stock being sold subject to contract.
“Prices are in the summer doldrums. Sellers coming to market at this time of year have to price more keenly as the traditionally bubblier spring selling season is over and prospective buyers are distracted by their own summer holiday plans” says Miles Shipside, Rightmove director and housing market analyst.
Whether we will see a significant summer slowdown is to be seen but we would generally remain confident that either way, the pace should pick up again in September as we see the traditional batch of promotional launch events. The story seems to be regional but demand remains good especially where Help to Buy is enabled. Have a great summer!