UK house market cools as growth rate hits four-year low

Tax changes and Brexit uncertainty believed to be reducing demand for UK property

Almost every gauge of British house prices is showing a slowdown. Photograph: iStock

Almost every gauge of British house prices is showing a slowdown. Photograph: iStock

 

UK house prices grew at their slowest pace in four years in June, adding to signs that the property market is cooling.

Prices grew 2.6 per cent compared with a year earlier, lender Halifax said in a report on Friday. On a quarterly basis, they slipped 0.1 per cent, and they declined 1 per cent from a month earlier.

Almost every gauge of British house prices is now showing a slowdown. Mortgage approvals fell to a seven-month low in April, according to the Bank of England, as rising inflation hampers consumer spending.

Tax changes and uncertainty around Britain’s exit from the European Union may also be crimping demand.

“Although employment levels continue to rise, household finances face increasing pressure as consumer prices grow faster than wages,” said Martin Ellis, Halifax housing economist.

“This, combined with the new stamp duty on buy-to-let and second homes in 2016, appears to have weakened housing demand in recent months.”

Nonetheless, a continued low mortgage-rate environment alongside a shortage of properties for sale should help support prices, he added.

– (Bloomberg)