UK house prices rise but underlying growth may be slowing, Halifax says

UK house prices growth surprisingly accelerated to 1.3% in June versus the previous month, according to data from Halifax, though it cautioned that the underlying pace of house growth "may be easing".

The month-on-month rise in June, which was recorded before the UK voted to leave the EU in the 23 June referendum, followed May's 0.9% increase and a dip of 0.8% in April.

Halifax also said that house price growth over the three-month period from April to June slowed to 1.2% compared to the preceding three months, down slightly from May’s 1.5% increase and the lowest rise on this basis since December 2014's 1.0%.

This, allied to the annual rate of growth falling from 9.2% in May to 8.4%, the lowest since July 2015, was "evidence that the underlying pace of house growth may be easing", said Halifax economist Martin Ellis.

He added: “House prices continue to increase, albeit at a slower rate, but this precedes the EU referendum result, therefore it is far too early to determine any impact since.”

Other economists noted that Halifax's data was in marked contrast to that from Nationwide, which showed house prices only edged up 0.2% in June, as they had done in May.

"Despite the Halifax reporting a marked rise in house prices in June itself, we believe that the prospects for the housing market have deteriorated markedly following the Brexit vote," said Howard Archer at IHS Global Insight.

He added that in spite of pretty solid fundamentals: "Housing market activity and prices now look to be at very serious risk of an extended, marked downturn following the UK's vote to leave the EU."

Jeremy Leaf, a former chairman of the Royal Institution for Chartered Surveyors and now an estate agent in London, said although data showed house price growth is slowing, it also revealed "the market showed surprising resilience in the period immediately following the increase in stamp duty".

He said this showed despite the extreme nervousness at that time, first-time buyers were taking advantage of opportunities on the market, while the continued shortage of housing stock and fewer transactions continues to underpin prices.

"Post-referendum at the coalface we have found vendors and buyers willing to proceed in the face of potential adversity with a new sense of realism about the changed environment they find themselves in. Vendors who are more realistic on pricing and buyers who are prepared to be more flexible are able to do deals."

Mark Harris, chief executive of mortgage broker SPF Private Clients, noted that with swap rates plummeting since the Brexit referendum, a number of mortgage lenders have slashed already-cheap mortgage rates further still, citing Thursday's launch by HSBC of the "cheapest ever ten-year fix", pegged at 2.79%, as an example.

He said: "Lenders are behind on where they want to be business-wise so we expect to continue to see a flurry of attractive rates over the summer."