House prices fell 1.0% in July, suggesting Britain’s booming property market is finally beginning to slow.
According to the latest Halifax house price index, annual house price growth remained static at 8.4% – the lowest since July 2015. The average house price was £214,678.
However, Halifax said that it remained too early to determine the impact of the EU referendum.
Martin Ellis, Halifax housing economist, said: “There are signs that house price growth is slowing with a deceleration in both the annual and quarterly rates of increase in the past few months. Nonetheless, the current rates remain robust.
“July’s monthly decline largely offsets June’s increase. The month-on-month changes, however, can be erratic and falls often occur within an upward trend.
On Thursday, the Bank of England cut interest rates from 0.50% to 0.25% – the lowest on record.
Most economists agree that reducing interest rates will help boost demand following the vote to leave the EU.
It is the first interest rate cut since 2009, when the financial crisis was at its peak.
According to data from the Council of Mortgage Lenders, the cut in interest rates could save someone £26 a month with a 25-year mortgage on a home worth £200,000.
Russell Quirk, founder and CEO of eMoov.co.uk, said: “Although it would seem the UK property market has lost steam since the vote with prices dropping 1% since last month, the summer period is always a traditionally slower time of year for residential property transactions.
“With prices still up 8.4% year on year, there’s no real evidence that UK homeowners need to jump ship just yet and so I would urge them to remain calm and avoid any rash decisions.
“Once the market picks back up in a couple of months’ time and the Brexit uncertainty starts to subside, I’m confident the previous upward trend in value enjoyed by UK homeowners will continue.
“In the meantime, this slight slowdown in price growth coupled with yesterday’s rate cut by the Bank of England, make it an ideal time for those considering a property purchase to strike while the iron is hot – slightly cooled in this case.”
