House prices fell unexpectedly for the second month in a row in July according to the Halifax - but the mortgage lender insists that speculation of a housing downturn is wide of the mark.
Its index showed prices on average across the UK falling 0.2 per cent, while the annual growth rate dropped to 4.1 per cent from 5.7 per cent - which even at this reduced level remains higher than many other analysts’ assessments.
Halifax managing director Russell Galley says: “The market continues to tread water with marginal increases or decreases in each month. 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 less than £600 over three months.
“We’ve 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 – driven by low interest rates and strong wage growth – 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.”
Agents have reacted to the Halifax figures with relief that they do not signal a downturn.
London agent and former RICS residential chairman Jeremy Leaf comments: “The Halifax figures always command respect, not least because they are well-established and have a good track record of accuracy. They confirm what we are seeing on the ground - there’s been no real change to house prices recently and no significant change is expected as buyers, in particular, seem to be looking beyond Brexit irrespective of the outcome.
“What is more important is the number of transactions, which remain sluggish and protracted as sellers reluctantly come to terms with new market realities.”
Meanwhile Marc von Grundherr, director of another London agency - Benham & Reeves - adds: “For the UK property market to have seen year on year growth of over four per cent despite the best endeavours of our politicians to de-rail public sentiment, has to be viewed as at least resilient - perhaps even astonishing".
And Springbok Properties’ chief executive Shepherd Ncube adds: “My money's on a post-Brexit bounce. Should the new PM actually deliver an EU exit on October 31 … will at least draw a line in the sand for hesitant house buyers and sellers and perhaps restore our battered market to some normality thereafter.”