According to mortgage lender, The Halifax, house prices rose for a second consecutive month in June, but also cautioned that the market remained flat overall. The monthly increase was not enough to stop the annual house prices from falling for the third month in a row.
Meanwhile, figures released at the end of June, the UK Cities House Price Index, published by Hometrack, showed that house price growth in London had slowed to a nine year low with Aberdeen and Cambridge actually showing falling house prices. The Halifax has said that it still expects house prices to reach its target of 3% growth for 2018.
Halifax Price Experiences Price Growth
The lender said that prices rose by 0.3% in June, but despite this being the second consecutive gain in prices, it was not enough to prevent annual growth from slipping. Annual growth is currently 1.8% compared to 4% at around the same time last year.
The Nationwide Sees Similar Increases
There has been a lot of volatility in prices, as well as disparity between house price figures from the Halifax and their main competitor, the Nationwide Building Society. However, the two lenders’ figures largely agree. The Nationwide said that they have seen figures rise by 0.5% in June and that annual price growth was 2%. The lender said that this was the lowest annual growth figure in the past 5 years.
Halifax Managing Director, Russell Galley, said that continued low mortgage rates, housing affordability, and a strong labour market are all good indicators that prices will continue to increase. He also pointed to the overall lack of housing on the market means that lower supply will help to push prices upwards again.
National House Price Growth
Meanwhile, the UK Cities House Price Index has shown that house price growth has slowed to the lowest point in nine years.
The Index also showed that prices in Edinburgh and Manchester are growing fastest while prices fell in Aberdeen and Cambridge. Edinburgh house prices grew by 7.1% while prices increased by 7% in Manchester. London house prices have only grown by 0.4%, with 4 in 10 of the boroughs actually seeing house price declines. Years of surging prices, coupled with slow wage growth and increasingly challenging mortgage criteria, has made it difficult for prices to continue their push.
Hometrack said that they expect the disparity between property prices in London and the rest of the country to continue to narrow. Richard Donnell, the company’s insight director, said that he expected prices in cities like Edinburgh, Manchester, and Birmingham would continue to increase at a faster rate than those in London and the South East. Strong job growth in these cities has been cited as the reason for these increases. Donnell went so far as to say that prices in these cities could increase by as much as 25%, if history is any indication of potential future growth.
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