Monthly house prices for June drop 0.6%, Halifax reports
07-09-2014
Bigger than expected falls bucks overall upward trend, which is expected to continue beyond 2015
Lisa Bachelor
Halifax building society
Halifax building society reports unexpected monthly fall in house prices for June. Photograph: Frank Baron for the Guardian
House prices experienced a bigger monthly fall than analysts had expected in June, knocking £1,100 off the average property value, according to the Halifax.
However, despite this drop – the fourth monthly price fall since last December – the value of the average house rose by £16,000 in the year to June, their biggest annual leap in seven years.
Prices in the three months to June, which are widely considered a better indicator of house price growth than the lender's monthly figures, were 2.3% higher than in the three months to March and 8.8% up on the same three months in 2013.
This brings the average house price to £183,462 compared to £167,668 in June 2013 and makes the typical property value five times the national average earnings of a full-time male employee.
"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," said Stephen Noakes, mortgages director at the Halifax.
Howard Archer, chief UK at Global Insight said: "While [the 0.6% drop] may be a sign that house prices are starting to lose momentum in reaction to the recent moderation in activity, June's drop must be treated with a high degree of caution as it followed a jump of 4.0% month-on-month in May. In fact, the Halifax house price index has been particularly volatile in recent months."
He added: "At the moment, house prices still look more likely than not to see clear increases over the coming months, although it is looking increasingly probable that there will be some easing back in house price gains from the recent strong increases."
Global Insight expects house prices to increase by around 4% over the second half of 2014 and by around 6&-7% overall in 2015.
The Halifax figures follow those from rival lender Nationwide earlier in the month that showed the average price of a property in London has leapt by more than a quarter over the past year. This was a rate of growth unequalled since the summer of 1987, according to the latest figures from the UK's largest building society.
The society's figures for the second quarter of 2014 showed price rises in all regions of the UK except Scotland, where prices remained flat between the first three months of the year and the second