House price growth eases to 3.3%: Halifax

The Halifax house price index released this morning shows that annual growth has eased to 3.3%, the lowest annual rate since May 2013, and housing supply remains low.

Related topics:  Mortgages
Amy Loddington
7th June 2017
slow down road

House prices in the last three months (March-May) were 0.2% lower than in the previous three months (December-February) - the second quarterly fall since November 2012 (-0.3%). Alongside this, the number of properties coming on to the market fell for the 14th consecutive month in April, keeping the average stock levels on estate agents’ books close to an historic low. 
 
Both house sales and mortgage approvals fell between March and April - sales by 3%, and mortgage approvals by 2%. Rising inflation and weak wage growth, together with higher stamp duty tax rates for buy to let and second home purchases have weakened market activity. 
 
Martin Ellis, Halifax housing economist, said:

“The fact that the supply of new homes and existing properties available for sale remains low, combined with historically low mortgage rates and a high employment rate, is likely to support house price levels over the coming months.”
 

Jeremy Duncombe, Director, Legal & General Mortgage Club, comments:

“We need to be clear that these figures are not showing prices are falling, they are just rising less quickly. Over a 12 month period, average prices are still rising at [3.5%] compared to wages rising by [2.1%]. This represents little comfort to struggling first time buyers trying to get on the property ladder. House prices remain staggeringly high across much of the country and the changes we are seeing in London and the South East are more a slow-down in astronomical price growth,  than an actual dip.
 
“The only way to help struggling potential buyers to purchase their first home is to build more houses in key areas. We need a realistic, deliverable plan, that will give this country the injection of new homes it needs to expand the market and make homeownership more accessible to all those who desire it.”

Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: 

"The Halifax figures are interesting as they reinforce findings from other recent surveys, suggesting that we should be concentrating not just on increasing supply of new homes but encouraging existing homeowners to move. Buyers and sellers have been in limbo recently with the market awaiting more certainty from the General Election and Brexit negotiations.

"However, the good news is that there is no sign of market collapse while mortgage rates remain low."

Mark Harris, chief executive of mortgage broker SPF Private Clients, says: 

"There has been quite a bit of repricing downwards on mortgage deals in the past week, with Accord, Virgin Money, Platform, New Street and Tesco all cutting rates.

"With transaction levels in the housing market muted, the chase for volume falls on remortgages so we are seeing a number of remortgage-only products priced more keenly than their purchase equivalents, although sometimes they come with lower loan-to-values. Lenders are keen to lend and with the mortgage market oversupplied in all areas, pricing is likely to remain competitive for the foreseeable future. This is particularly good news for borrowers who are coming up to remortgage."

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