House prices reflect UK’s economic uncertainty

The property market is “treading water”, but there are positive signs in the number of new buyer enquiries and a rise in mortgage approvals.

The latest monthly house price index from the Halifax revealed that house prices fell by 0.2 percent in July, but house pries in the three months to July were actually up by 4.1 percent on the same period in 2017.

Outlook is brighter

The Halifax analysis of HMRC data in the year to June 2019 saw 84,490 completed home sales, down on the same period a year ago.

But with mortgage approvals above the 12-month average and a noted increase in the number of properties coming to market, according to the Royal Institution of Chartered Surveyors (RICS) monthly survey, the outlook for both buyers and sellers is relatively bright.

The summer months see a traditional slowdown in property sales. Combined with economic uncertainty and the looming prospect of Brexit by the end of October, it could have added to a perfect storm of inactivity in the housing market.

The latest Halifax price index suggests that has not happened.

Buyer enquiries up

Russell Galley, Halifax managing director, said:

“…the market continues to tread water with marginal increases or decreases in each monthly period.

“That said, it’s worth remembering that while economic uncertainty continues to weigh on the market, the overall trend actually remains one of comparative stability, with average prices down by less than £600 over the last three months.

“We have seen a reported drop-off in the number of properties sold during the early months of summer, which may lead some to speculate a downturn is on the horizon.

“However, new buyer enquiries are up, and favourable mortgage affordability should continue to underpin prices for the time being.

“In the longer term, we believe there is unlikely to be a step change in market activity until buyers and sellers see some form of resolution to the current economic uncertainty.”

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