UK house prices growth subsides to four-year low - Halifax

UK house prices continue to waver, according to data from Halifax that showed a monthly fall in June and the lowest year-on-year growth for four years.

House prices fell 1.0% in June compared to the month before, Halifax said, which was worse than the small 0.2% rise forecast.

This meant that year-on-year price growth for the three months ending June was dragged down to 2.6%, the lowest annual rate for four years.

The three-month period from April to June as 0.1% lower than in January-March, which was the third successive quarterly fall, something that last occurred in November 2012.

Martin Ellis, Halifax housing economist, said: “House prices have flattened over the past three months. Overall, prices in the three months to June were marginally lower than in the preceding three months.

He added: "Although employment levels continue to rise, household finances face increasing pressure as consumer prices grow faster than wages. This, combined the new stamp duty on buy to let and second homes in 2016, appears to have weakened housing demand in recent months.

“A continued low mortgage rate environment, combined with an ongoing acute shortage of properties for sale should help continue to underpin house prices over the coming months.”

Economist Sam Tombs at Pantheon Macroeconomics said the monthly fall "probably doesn’t mark the start of a sustained fall in prices", with the volatile even at the best of times and rival Nationwide reporting a 1.1% month-to-month rise in its similar measure of prices in June.

"The underlying trend in prices probably is flat, with the impact of weak underlying demand being offset by a sharp contraction in the number of homes for sale," Tombs said.

"The trend in prices likely won’t improve in the second half of this year, though. The recent pickup in wholesale financing costs, due to speculation that the MPC will raise interest rates soon, will prevent mortgage rates from falling further."

With consumer confidence continuing to decline and the pressure on real incomes looking set to intensify as inflation rises, he said there was a risk his forecast that house prices will be 2% higher year-over-year by the end of 2017 could be optimistic.