Month saw a one per cent fall but rolling three-month rise was steady, says Halifax
Those hunting for signs of a post-referendum slowdown in the property market were seizing this morning on the latest Halifax house price index, which showed a month-on-month fall in July. “House prices fell one per cent last month following the vote to leave the EU,” says The Guardian. “The month-on-month fall took the average house price to £214,678. The decline was the third this year and largely offset a 1.2 per cent increase in June.”
However, as with all data in the relatively short period since the Brexit vote, the trend is not as simple – or negative – as this might suggest. Halifax cautioned that monthly numbers can be “erratic” and that “falls often occur within an upward trend”. It prefers instead to focus on three-month rolling averages, which it compares with the previous month and year.
In this light, house prices in July were “robust”, it said. Prices rose 1.6 per cent in the three months to July compared to the three months ending in June, representing acceleration in growth from the 1.1 per cent for the three months to May. On an annual basis, prices for the three-month period were up 8.4 per cent, unchanged from June.
There are signs that house price increases might be slowing, with both the quarterly and annual rates of growth below their peaks earlier this year. However, that has at least as much to do with the rush to beat April’s stamp duty hike on second homes as the Brexit vote. Martin Ellis, Halifax housing economist, said: “Overall, it remains too early to determine if there has been any impact on the housing market as a result of June’s EU referendum result.”
A further positive sign came from underlying data for the three months to June showing the volume of transactions actually increased in the lead up to the Brexit vote, says the Financial Times.Added to that is yesterday’s rates cut from the Bank of England, which should translate to a fall in already record-low mortgage costs that would support demand in the near future. Ben Madden, the managing director of London estate agents Thorgills said: “Although house prices are easing in the post-Brexit world, they’re proving far stickier than many predicted. “The acute supply shortage was always going to act as a glass floor under prices post-Brexit and the latest rate cut has made that floor a few inches thicker.”