Easy does it: house price growth eased 1 per cent in June
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House price growth slowed last month to the lowest annual rate since May 2013 as effect of stagnating wages and stamp duty on second homes bites
Annual house price growth eased off in June as stamp duty on second homes combined with slow wage growth dampened demand.
Annual house price growth was 2.6 per cent higher last month than in June last year, down 1 per cent from 3.3 per cent in May and the lowest rate annually since May 2013.
Prices fell just 0.1 per cent in the three months leading up to June, the third quarterly fall in a row for the first time since November 2012.
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Sales in the three months to May were 1 per cent higher than the previous three, although sales have exceeded 100,000 for the last five months. Agents are struggling to shift stock, with record low numbers of stock on their books. New instructions fell for the 15th month in a row in May.
However, mortgage approvals increased 0.2 per cent between April and May, the first increase since January suggesting that house purchase rates are beginning to stabilise since they are generally confined to a range between 65,200 and 68,600
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First time buyers continued to dominate the market, reaching 162,704 in the first half of 2017, whilst 47 per cent of all purchases financed via a mortgage were made by a FTB. The numbers of FTBs are still 15 per cent below their 2006 peak.
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 per cent; 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.”