Average house price falls to lowest of the year

The price of an average house stood at £198,883 in July, a decrease of 0.6 percent compared to June.

The annual reading of 7.9% for the three months to July was down from its 9.6% spike in the three months to June, from 8.6% in the three months to May.

“July’s dip looks to be primarily a correction from June’s jump which was markedly at odds with most other surveys”, said Howard Archer, chief economist at IHS Global Insight. That made the average UK house price £195,621 last month, increasing by a monthly 0.4 per cent, according to their figures.

“Taking an overall view of house prices based on the various surveys, our current forecast is for house prices to rise by six per cent over 2015”. Supply is highly restricted with the stock of homes available for sale falling further to new record lows.

Looking at the house price graph below you can see that house prices as seen by Nationwide, Halifax and the Land Registry are now matching pre-credit crunch levels with no real sign of the upward trend levelling off anytime soon.

Halifax says this combination will ensure house price growth remains strong in the near-term. The dominant narrative within the UK property market continues to be weak supply and strong demand.

An interest rate rise is looming on the horizon, but comments from the Bank of England today suggested that a hike will not take place before next year.

Stephen Noakes, managing director for retail customer products at the lender, said the measure of underlying house price growth eased following last month’s sharp increase.

“Right now we have reasonably good market conditions, with a healthy economy, wage growth, low interest rates and a cluster of great mortgage deals”.