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Aug 19

The latest data and analysis from UK HPI has revealed that average house prices across the UK increased by 0.9% in the twelve months to June, unchanged from May's figure.

On a non-seasonally adjusted basis, average house prices increased by 0.7% between May and June, the same as in May and June 2018. However on a seasonally adjusted basis, prices increased by just 0.1%.

The East Midlands was the English region with the highest annual house price growth, with prices increasing by 3.2% in the year to June. This was followed by the West Midlands, with prices increasing by 2.6%.

The lowest annual growth was in London, where prices fell by 2.7% over the year. Average house prices in London have now been falling over the year each month since March 2018, a period of 16 months. This compares to 15 months of prices falling over the year in London during 2008 and 2009, the period of the economic downturn.

As ever, the property industry was quick to react. Here's what they're saying:

Tomer Aboody, director of property lender MT Finance, says: "Would-be buyers and sellers are still waiting for Brexit to be resolved. Whether it is hard, soft, or no Brexit, the important thing is that a decision is made so people can get on with things. Sales volumes are relatively similar to last year and the couple of years before that because Brexit indecision has been going on for so long. This will improve once a decision is made, and pent-up demand will be released.

Prices have fallen slightly in London but not dramatically so. This average figure masks significant falls at the top end, where prices have come off by 10 or 15 per cent. If we have a hard Brexit and the pound is badly affected, foreign buyers will come back into the market as they will be buying 20 or 30 per cent off market value with a much stronger Euro, Dollar or Yen against the pound. This is likely to push volumes and values up."

Marc von Grundherr, Director of Benham and Reeves, commented: “The lowest rate of annual house price growth since the Brexit vote demonstrates the detrimental impact that our current political position continues to have over the sentiment of UK buyers and sellers, particularly those in London.

However, while other reports based on asking prices and mortgage approvals may provide a more sensationalist view, figures on sales completions suggest a market that is ticking over in neutral rather than careering off a cliff.

Transaction levels remain muted but steady and while prices aren’t accelerating, they are stable, and we are world’s away from seeing a market crash. A seasonal uplift in buyer activity over the coming months should see property price growth climb through the gears and depending on which EU exit we take; the market should return to full speed with ease before the year is out.”

Shepherd Ncube, Founder and CEO of Springbok Properties, commented: “The property market is certainly stuttering, and this won’t be welcomed by the nation’s homeowners but, of course, those looking to get a foot on the ladder won’t complain about a momentary respite in the escalating cost of doing so.

It’s important to note that we aren’t seeing a market freefall, far from it, but after such a prolonged period of notable house price growth, the market is now adjusting at a natural rate to align itself with the current climate.

As a result, the rate of growth in London and the South East continues to see negative movement while the traditionally more affordable regions of the UK remain defiant, registering healthy levels of growth across the board.”

Kevin Roberts, Director, Legal & General Mortgage Club, comments: “While house price growth in recent years has helped many existing homeowners build equity, for those looking to take their first steps onto the ladder, current prices have stretched affordability. Fortunately, help is available. The Government’s Help to Buy scheme has supported thousands of first timers onto the ladder and innovation from mortgage lenders has offered new and existing homeowners a lot of different ways to find a mortgage.

Lenders are increasingly finding new ways to help consumers meet affordability requirements and the low interest environment has helped many reduce their monthly repayments. Whether looking to remortgage or secure finance on a new property, speaking to an independent mortgage adviser is where the journey should start. These professionals have access to thousands of mortgage products and can offer bespoke advice, making them well-placed to find the solution most suited to the needs of the consumer.”

Josef Wasinski, co-founder of Unmortgage, said: “These figures won’t ease the struggle for the millions of reluctant renters who are crying out for a realistic route to get onto the property ladder. The sad reality is that the stability of homeownership is a distant dream for millions of hardworking, credit-worthy people.

When Brexit-related uncertainty’s added to the mix, the future looks bleak for would-be homeowners without either bank or mum and dad or hundreds of thousands of pounds in savings.

Without real and meaningful change to the UK’s housing market, too many would-be homeowners will remain locked out, effectively blocked from ever owning their own home.”

Sam Mitchell, CEO of online estate agent Housesimple, adds: “A summer slowdown isn’t surprising – we seldom see big spikes during the warmer weather. But, with the threat of a no-deal Brexit looming we could see considerable changes in usual seasonal property patterns in the months ahead.

The Halloween deadline is fast approaching and with that comes the fear and urgency of home movers to complete deals before we leave the EU. While the longer-term outlook remains uncertain, this is likely to stimulate a lot of buyers and sellers throughout the housing chain in the next three months – from first-time buyers all the way up to downsizers.

At a regional level, the Midlands has the highest annual house price growth. Favourable economic fundamentals has resulted in continued house price growth year on year, again showing the resilience of the property market in this particular region. Meanwhile, London’s ongoing price fall was toned-down in June after a dramatic drop the month prior, but the capital’s decline continues to weigh down on the overall UK average.”

Dilpreet Bhagrath, from online mortgage broker Trussle, says: “With house prices unchanged from May 2019, the property market still remains stagnant. And with a no-deal Brexit looming, this suggests that would be house-buyers are wary of committing to make the move.

However, for those that can afford to get onto the housing ladder, more borrowers are thinking strategically of how best to protect themselves against the ongoing Brexit chaos by locking into decade-long fixed rate mortgages1. And with some lenders offering longer term security products, this approach is possible.

As ever, it’s always important to consider any personal and future circumstances when securing a mortgage, and seek advice to ensure you’re aware of the available options.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, comments: ‘It is steady as she goes for the housing market, which is no mean feat given that it is the summer months when things traditionally get quieter and the backdrop of Brexit uncertainty. London is still creating a drag on average house price growth, with prices falling 2.7 per cent over the year to June. However, this was an improvement on the May fall of 3.1 per cent, suggesting price falls could be slowing and the market stabilising.

Mortgage approvals rose slightly in June. Lenders remain keen to lend with a number cutting rates or easing criteria in order to encourage business. Remortgaging is likely to be particularly busy this autumn with many borrowers coming to the end of deals and lenders ready to pick up that business with long-term fixes in particular.'

Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: "We are finding that the mood among many homebuyers and sellers is matching that in Westminster. Decision-making has been put on hold until more clarity emerges which is reflected in very little movement for property prices this month.

What is more concerning is the reduction in number and pace of transactions which are lower than this time last year with once again London acting as a drag on the rest of the market. Nevertheless, some are taking advantage of greater realism among sellers and on the plus side we have seen no evidence of widespread reductions on previously-agreed prices, or withdrawals."

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