"On the surface, this appears at odds with recent signs of cooling in the housing market. The number of housing transactions dipped to their lowest level for eight months in June"
House prices also saw a modest 0.3% increase month-on-month.
Robert Gardner, Nationwide's Chief Economist, said: “On the surface, this appears at odds with recent signs of cooling in the housing market. The number of housing transactions dipped to their lowest level for eight months in June, while in the same month the number of mortgages approved for house purchase moderated to a nine-month low of c.65,000.
“But a lack of homes on the market appears to be providing support, with annual house price growth remaining only just outside the 3-6% range, that has been prevailing for most of the past two years.
“This pattern looks set to be maintained in the near term. Survey data point to relatively sluggish levels of new buyer enquiries, but at the same time surveyors report that relatively few properties are coming onto the market."
Jeremy Leaf, north London estate agent and former RICS residential chairman, commented: "Although these figures on the face of it look quite encouraging when one considers the fall in transactions, it is clear that prices are being supported by a lack of property on the market. We would have expected transactions in particular to be higher compared with last year bearing in mind how much quieter the market was 12 months ago following the introduction of the stamp duty surcharge.
"On the plus side, activity could be much lower bearing in mind current political uncertainty and fortunately there does seem an enthusiasm among serious buyers and sellers to get on with the job in hand. The current climate is also providing an opportunity for first-time buyers at least to better compete for smaller properties."
Brian Murphy, Head of Lending at Mortgage Advice Bureau, added: "This underscores what Mortgage Advice Bureau are observing in the market and have been saying for some time, which is that consumer confidence in property remains robust and that demand remains largely undented.
"It is, of course, the ongoing lack of supply coupled with continuing demand for property that is driving prices, although the mix appears to be changing with landlords transacting less frequently – or indeed divesting their portfolios in some cases – due to the tax changes, which has led to an opportunity for first time buyers who would normally be competing for the same type of property with an investor. Buyers at all levels are also benefitting from some of the lowest interest rates ever offered by lenders, together with the increased availability of 5% and 10% deposit mortgages, all of which reflect the fact that the UK lending community is very much open for business.
"Of course, we are hitting peak holiday time now, and seasonally sales do slow in August as many put their home moving plans on hold to take their well-earned Summer break. That said, we are going into one of the traditionally more quiet times of the year with the UK housing market in good shape, potentially suggesting that the second half of 2017 could see the market remain at a stable trajectory.”
