House prices fall: are tighter rules calming the market?
New data from Halifax shows fourth monthly fall in house prices since December
Has Britain's bubbling housing market begun to stabilise? Fresh evidence of a cooling of the market has emerged in the latest house price survey from Halifax.
Although house prices in the three months to June were 8.8 per cent higher than they were a year earlier, the building society reports that prices fell by 0.6 per cent between May and June, the fourth monthly fall since last December. This left the average price of a home at £183,462.
However, Halifax's data is at odds with two other recent housing reports. A poll by Reuters had forecast a 0.2 per cent monthly gain and a separate survey released by Nationwide last week reported a one per cent rise in prices in June.
Taking a wider view, Berenberg's chief UK economist Rob Wood tells The Times that Halifax and Nationwide's figures between them suggests house price inflation has stabilised at about 10 per cent annually.
Tougher mortgage affordability tests and warnings of looming mortgage rate rises appear to be having an impact on the market. Halifax, citing figures from HMRC, said home sales fell below 100,000 in May for the first time in six months, a 3 per cent decline. Meanwhile, the Bank of England says mortgage approvals are at an 11-month low.
Nevertheless, industry figures expressed confidence that the market would remain robust. "Housing demand continues to be supported by an economic recovery that is gathering pace, with employment levels growing and rising consumer confidence, although real earnings growth remains sluggish," Halifax's mortgage director Stephen Noakes told Bloomberg.