Not all doom and gloom in the housing market?
The Halifax House Price Index has been released for the month of June - however it has revealed a few surprising stats.
New builds holding their own
Following headlines reporting rises in interest rates and squeezing household budgets, there were concerns that house prices may plummet as demand dries up for new buyers in the market.
Despite the reports, average house prices fell by just 0.1% in June and it seems new build prices are proving to be more resilient compared to existing homes.
The wider picture
According to Halifax, the 0.1% dip equates to around £300 of the average house price, which may not seem a lot, but it is the third consecutive monthly fall. The national high street bank also voiced concerns that the annual drop in house prices is around 2.6% - meaning average house prices have dropped £7,500 since 2022 - the largest year on year decrease since June 2011.
However, while the figures could be a sign of wider economic uncertainty, house prices were over inflated during the pandemic and experts at Halifax suggest that actually these are just house prices returning to normal.
Kim Kennard, Director of Halifax Mortgages said: “To some extent the annual growth figure also masks the fluctuations we’ve seen in the market over the past 12 months. Average house prices are actually up by +1.5% (£4,000) so far this year, with most of that growth coming in the first quarter, following the sharp fall in prices we saw at the end of last year in the aftermath of the mini-budget.
“These latest figures do suggest a degree of stability in the face of economic uncertainty, and the volume of mortgage applications held up well throughout June, particularly from first-time buyers. That said, the housing market remains sensitive to volatility in borrowing costs.”
Is it all doom and gloom?
No one has a crystal ball and how persisten the downturn in prices is hard to predict. There will no doubt be a stabilisation period and prices may fluctuate - but there could also be a glimmer of hope as the number of newbuilds sold has increased 1.9% annually.
And, for those living in the midlands and the north of the country, house prices continue to rise. The West Midlands were +1.5% (average house price of £251,139), along with marginal gains in Yorkshire & Humberside (+0.2%, £203,674) and Northern Ireland (+0.2%, £186,856).
If you are considering a property purchase and would like some further guidance, contact the property team at Downs Solicitors to see how we can help and work with you.