House prices fall in July despite home stock decline

House prices jumped by 0.4 per cent month-on-month in July, pushing the average property value to a new all-time high of £195,621, Nationwide Building Society has reported.

Though fears are likely to grow after hearing news of further price increases within Britain’s housing market, Nationwide stated there have been “tentative signs” of stabilisation.

The annual house price growth eased for three months to July, to 7.9 percent from 9.6 percent in June and was at its lowest since December 2014.

“Nevertheless, the upside for housing market activity and prices is expected to be constrained by more stretched house prices-to-earnings ratios, tighter checking of prospective mortgage borrowers by lenders and the likelihood that interest rates will soon start rising gradually”, he said.

“Continuing economic recovery, earnings growth in excess of consumer price inflation and very low mortgage rates all underpin housing demand”, he said. Again the housing shortage is an ogre we can’t shake off. Stock is at a record low with three successive months of slippage in available homes for sale.

He added that this stabilisation in the market bodes well for buyers, sellers and developers alike, although this levelling out of price growth will be dependent upon the ability of UK house builders to keep up with levels of demand.

Jonathan Samuels, chief executive of Dragonfly Property Finance, pointed out that, despite the fall in prices during July, house prices overall were still rising.

Royal Institute of Chartered Surveyors North West spokesman, John Halman of Gascoigne Halman estate agents said: “July and August are often regarded as the “holiday season” as there is a lull in activity due to the short supply of quality homes coming on to the market”.

House prices have experienced their biggest monthly slowdown in more than a year, according to Halifax.