What's going on with house prices?

As we’ve said before, we’re not obsessed with house prices. But, let’s be honest, if you own a house or are thinking of buying one, you’re bound to be sort of interested, aren’t you?

So, what can we all make of the latest house price report from Halifax?

Well, according to this major mortgage provider, average prices went up in July. But not by much - just 0.4 per cent.

And over the most recent ‘quarter’ (the three months from May to July) as a whole, they actually fell by 0.2 per cent compared with the quarter from February to April. This is the fourth quarter in a row in which average house prices have fallen.

According to the government, the number of houses being sold in the UK is falling. After exceeding 100,000 for five successive months, home sales fell by 3 per cent between May and June to 96,910. This is the lowest level since 96,740 in October 2016.

So, what’s going on? It is all a bit confusing.

It seems that the Halifax has been seeing a levelling off in prices. But maybe, looking at July’s figures, that is coming to an end. Or maybe not. We shouldn’t read too much into figures from just one month – that’s why the survey lays such a lot of stress on quarterly figures.

Russell Galley, managing director of Halifax Community Bank, said:

“House prices continue to remain broadly flat, as they have since the start of the year. Prices in the three months to July were marginally lower than in the preceding three months, while the annual rate of growth has edged down from 5.7 per cent in January to 2.1 per cent in July; the lowest rate since April 2013.”

And, if you want to take a longer-term view, Halifax points out that house prices in July 2017 were 10 per cent above their August 2007 peak just before the 'financial crisis' that started that year. The average house price of £219,266 is £64,603 (42 per cent) higher than its low point of £154,663 in April 2009 in the middle of that crisis.

Looking at what you actually get for your money, the average price for a square metre of house across Britain has increased by 236 per cent over the past 20 years, from £672 in 1997 to £2,260 in 2017.

It will be interesting to see what the data shows in three months’ time. Rising prices may be good if you own a house but are clearly bad news if you have yet to get onto the ‘property ladder’.

Whether you are moving up that ladder, down-sizing or trying to take your first step, Larkfleet is here to help. Check out the various schemes we have for helping with house purchase on our website.