Slowdown in UK housing market ‘doesn’t mark the start of a sustained fall in prices’
The UK housing market may have currently flattened to the lowest level since 2013, but this does not necessarily mean that property prices are suddenly about to nosedive.
Halifax released its latest house price data last week showing that growth in property prices had eased from 3.3% in May to 2.6% in June, while the figures also revealed that home values in the period between April and June were 0.1% lower than they were in the previous three months.
Property prices in the UK housing market for June dropped by 1% month-on-month, taking the average price of a home to £218,390, but Samuel Tombs of Pantheon Macroeconomics, insisted that this “probably doesn’t mark the start of a sustained fall in prices”.
He added: “The underlying trend in prices probably is flat, with the impact of weak underlying demand being offset by a sharp contraction in the number of homes for sale. The trend in prices likely won’t improve in the second half of this year, though.”
Jonathan Hopper, managing director of Garrington Property Finders, agrees that despite a recent slowdown, property prices being are being propped up by the lowest ever level of homes for sale.
He said: “The UK housing market may have healthy levels of intent among buyers, but with many discretionary sellers holding off on listing, supply is being choked and prices artificially supported. Nevertheless price growth is meandering and tentative at best.”
Hopper also pointed out that some property investors are using the recent slowdown in the market as a prime opportunity to negotiate significant price reductions.
“We’re increasingly seeing astute buyers seize the opportunity to secure substantial discounts,” he added.