Property prices rise while sales dip in July

UK property prices continue to grow this summer, but there are indications demand is cooling according to the latest UK House Price Index.

The July data shows an annual price increase of 8.3% which takes the average property value in the UK to £216,750. Monthly house prices rose by 0.4% since June 2016.

Growth

In England, the July data shows an annual price increase of 9.1% which takes the average property value to £232,885. Monthly house prices rose by 0.5% since June 2016.

Wales shows an annual price increase of 4.0% which takes the average property value to £144,828. Monthly house prices fell by 1.8% since June 2016.

London shows an annual price increase of 12.3% which takes the average property value to £484,716. Monthly house prices rose by 1.0% since June 2016.

The regional data indicates that:

  • East of England experienced the greatest increase in its average property value over the last 12 months with a movement of 13.2%
  • the North East experienced the greatest monthly growth with an increase of 2.3%
  • Yorkshire and The Humber saw the lowest annual price growth with an increase of 4.7%
  • West Midlands saw the most significant monthly price fall with a movement of -0.8%

Sales

UK home sales fell by 0.9% in July 2016 compared to the previous month, which means that home sales on a monthly basis remain below levels seen in 2014 and 2015 and before the stamp duty changes in early 2016. Meanwhile lending approvals for house purchases also fell by 5.1% in July, continuing a downward trend established since the start of the year.

Sales during May 2016, the most up-to-date Land Registry figures available, show that:

  • the number of completed house sales in England fell by 33.5% to 49,795 compared with 74,897 in May 2015
  • the number of completed house sales in Wales fell by 29.6% to 2,596 compared with 3,685 in May 2015
  • the number of completed house sales in London fell by 46% to 5,111 compared with 9,466 in May 2015
  • there were 494 repossession sales in England in May 2016
  • there were 57 repossession sales in Wales in May 2016
  • the lowest number of repossession sales in England and Wales in May 2016 was in the East of England

The full report is available here.

Reactions

Rob Weaver, Director of Investments at property crowdfunding platform Property Partner:

“The resilience of the UK housing market is rooted in the structural mismatch between supply and demand. While activity lately has been subdued, that imbalance has been maintained.

“Some potential buyers got cold feet following the Brexit vote, but sellers too withdrew from the market, resulting in a further drop in the stock of homes available for sale.

“London is defying the doom-mongers. Monthly figures fluctuate and should be treated with caution, nevertheless a one per cent jump in prices in July, combined with an annual increase of over twelve per cent, looks robust.”

Katherine Binns, of HomeOwners Alliance:

“We are seeing signs of hesitancy among both buyers and sellers at the moment. We expect this to continue in the short term until there’s greater certainty around the economic impact of Brexit.

“Time will tell whether the recent Bank of England cut in interest rates will help to boost confidence and generate an increase in buyer and seller numbers in the autumn. However, despite this slowing in activity, tight supply is likely to keep upward pressure on house prices. So we’re not expecting a drop in the short term.”

Russell Quirk of eMoov:

“An annual increase of 9.1% and a marginal increase 0.5% since June shows that there has been no immediate impact on the market in England since Britain’s decision to leave the EU.

“Although this isn’t news as such, this data from the Land Registry acts as a more concrete confirmation compared to the likes of Halifax and Nationwide who base their figures on mortgage data.

Shraga Stern, Director, Decorean:

“The ONS statistics do not come as a major surprise to us. We said before and immediately after that Brexit will not dampen the appetite for housing in the UK. Living in this country is, and always will be, incredibly desirable, and so demand will continue to grow.

Price, monthly change and annual change by country and government office region

Country and government office region Price Monthly change Annual change
England £232,885 0.5% 9.1%
Northern Ireland (Quarter 2 – 2016) £123,241 3.8% 7.8%
Scotland £143,711 1.3% 3.4%
Wales £144,828 -1.8% 4.0%
East Midlands £173,783 0.5% 7.8%
East of England £273,806 0.6% 13.2%
London £484,716 1.0% 12.3%
North East £129,750 2.3% 5.8%
North West £150,082 0.8% 6.1%
South East £313,315 0.6% 11.9%
South West £237,291 -0.3% 7.8%
West Midlands Region £176,598 -0.8% 6.4%
Yorkshire and The Humber £151,581 0.2% 4.7%