Finance / Fall in house prices but experts insist market remains 'robust'

Fall in house prices but experts insist market remains 'robust'

Property values fell by 0.6% month-on-month in July, although the underlying pace of price growth remains "robust", Halifax has reported.

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The dip took the average house price across the UK to £198,883.

House prices increased by 7.9% in the year to July, edging down from an annual rate of growth of 9.6% in June.

July’s annual pace of growth is the weakest seen since December 2014, Halifax said.

Stephen Noakes, managing director retail customer products at Halifax, said that despite the dip in July, “the underlying pace of house price growth remains robust”.

He said: “Continuing economic recovery, earnings growth in excess of consumer price inflation and very low mortgage rates all underpin housing demand. Supply is highly restricted with the stock of homes available for sale falling further to new record lows.

“This combination of well-supported demand and tight supply is likely to ensure that house price growth remains relatively strong in the near-term.”

Halifax pointed to recent Bank of England figures showing that the number of mortgage approvals made to home buyers increased by 3% in June, indicating an upturn in housing market activity.

Last month, Bank of England governor Mark Carney suggested that the base rate could start to rise from its historic 0.5% low around the turn of the year.

A mortgage price war has broken out in recent months – but figures released by financial information Moneyfacts yesterday showed that the mortgage rates on offer for borrowers with larger deposits have started to creep up.

Moneyfacts’ data shows that the average two-year fixed rate for someone with a 40% deposit has increased from 1.81% in July to 1.86% in August.

For someone looking for a five-year fix with a 40% deposit, the average rate on offer has edged up from 2.54% to 2.59%.

The trend marks the first time in a year that Moneyfacts has started to see the rates on deals for people with a 40% deposit creep up.

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