Halifax reports ‘softening’ house sales in August

Despite UK house prices declining in August, values are still almost 7 per cent higher than a year ago, according to Halifax.

UK property market August 2016
House prices in the UK declined by 0.2 per cent from the previous month in August, though average values were still 6.9 per cent higher than they were a year earlier, according to the latest Halifax report.The annual price growth rate was the lowest recorded for three years amid signs of softening sales activity, exacerbated by post-referendum uncertainty and the usual summer lull.By Halifax's calculations, the UK average for a home last month stood at £213,930. The month-on-month decline in August was smaller than the 1.1 per cent fall recorded in July. On a quarterly basis, the average rise over the three months to August was 0.7 per cent."House price growth continued the trend of the past few months in August with a further moderation in both the annual and quarterly rates of increase," said Martin Ellis, Halifax housing economist. "There are also signs of a softening in sales activity. The slowdown in the rate of house price growth is consistent with the forecast that we made at the end of 2015."Increasing difficulties in purchasing a home as house prices continued to increase more quickly than earnings were expected to constrain demand, curbing house price growth.”

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Jonathan Hopper, managing director of Garrington Property Finders, commented, “A year ago, many would have regarded such a slowdown in house price rises as cause for concern. But in today’s environment, they are curiously reassuring as they are further evidence that the post-Brexit property market is making a soft landing rather than slumping.“House-hunting traditionally takes a back seat in August and this year the summer slowdown amplified the post-Brexit sluggishness. With both supply and demand falling, the result is a benign stalemate, with average prices creeping up as the number of sales falls.“On the front line, we’re seeing strong intent but a lack of clarity among buyers. August’s cut in interest rates and resilient levels of consumer confidence mean there are some determined buyers out there.“Many who equivocated in the run-up to the Brexit vote are finding that the fence is starting to hurt, and are finally getting off it. There’s a growing sense that this is a buyer’s market, with the boldest frequently asking for substantial discounts in return for the certainty of a sale.“Crucially, sellers have battened down the hatches rather than abandoned ship. Price growth has eased, and among the top tiers of the market, prices have returned to more genuine market levels.“The dust has yet to fully settle and Brexit concerns continue to limit both supply and demand, but prices continue to rise, albeit at more modest levels. It’s not yet business as usual in the property market but, as we approach the Autumn market, there are signs we’re getting there.”Alex Gosling, CEO of online estate agents HouseSimple, added, “The post-Brexit armageddon and its predicted dire repercussions for the property market simply haven’t materialised. House price growth has slowed since July, but it would be hysterical to attribute this softening to anything but a seasonal slowdown. “September will provide a much better gauge as to the health of the housing market, as typically the number of buyers and sellers picks up significantly.“All in all, house price growth – buoyed by a strong labour market – is showing itself to be remarkably resilient to the macro-economic headwinds that have swept the UK over the last six months."The shortage of stock continues to be a concern, but the hope is that any fears around the impact of the EU vote have dissipated."

For more about the UK property market, see our Residential Property section.

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