According to the latest Halifax house price index, prices in the three months to June were also 9.6% higher than in the same three months a year earlier. This was higher than May’s 8.6% and the highest since September 2014 (9.6%).
House prices increased by 1.7% between May and June; the fourth consecutive monthly rise.
UK home sales increased by 1.0% between April and May to 98,540. Similarly, sales in the three months from March to May were marginally higher (+0.5%) than in the preceding three months, but were 4.2% lower than in the same period last year.
The stock of homes available for sale fell again in May to a new record low. New instructions declined in May for the fourth successive month, contributing to the very low levels of supply. At the same time, new enquiries from potential buyers increased in May to its highest level since April 2014, suggesting a modest pick-up in demand.
Martin Ellis, housing economist, said:
"House prices in the three months to June were 3.3% higher than in the preceding three months. This measure of the underlying rate of house price growth picked up following two successive falls. Annual house price growth also increased to 9.6% from 8.6% in May and is at its highest since September 2014.
“Supply remains very tight with the stock of homes available for sale currently at record low levels. This shortage has been a key factor maintaining house price growth at a robust pace so far in 2015. Economic growth, higher employment, increasing real earnings growth and very low mortgage rates are all supporting housing demand with signs of a recent modest pick-up in demand.”
Jeremy Duncombe, Director, Legal & General Mortgage Club, commented:
“With continued house price growth following the election, the market remains unaffordable for many. A projected surge in demand in the second half of the year will work to further exacerbate this issue by pushing house prices even higher. The best way to bring long term stability to the housing market is to boost the supply of new homes in order to keep up with demand.
"First-time buyers are having difficulty getting on the property ladder, particularly in rural areas as shown by the recent National Housing Federation research. As a result, many younger people are forced to wait until later in life to buy their own home. The day when these young people are able to realise their dream of homeownership may never come unless the government follows through on its pledge to build more houses. We hope to see housebuilding at the heart of today’s Budget, along with a concrete strategy on how the government plans to deliver on their promise to boost supply.”
Jonathan Hopper, managing director of Garrington Property Finders, added:
“Rumours of an early start to the summer lull are greatly exaggerated. With demand greater than supply for all but the most expensive prime property, prices are continuing to march upwards.
“But seller expectations have been outstripping what buyers are willing to pay in several parts of the UK – and this overconfidence is finally being checked.
“The post-election surge, when the market was buoyed by thousands of new instructions and newly confident buyers, has proved to be a relatively short boost. Despite mortgages being at their cheapest level for years - and the supply of homes for sale being tight in many price brackets - buyers are still intensely value sensitive. Buyer demand is strong but sensible, and buyers are being much more sober in their offering behaviour than in the last boom.
“Though confidence among both buyers and sellers remains high, as the summer slowdown begins, sellers must be wary of letting their pricing ambitions run away from what the market will tolerate.”
