House prices fall for the first time in 5 months

House prices fell for the first time in five months in July, says Halifax.

According to the lender’s latest house price index, prices fell 0.6 per cent to £198,883 last month.

However, on an annual basis, prices were up 7.9 per cent.

Halifax managing director of retail customer products Stephen Noakes says: “The underlying pace of house price growth remains robust notwithstanding the easing in July. Continuing economic recovery, earnings growth in excess of consumer price inflation and very low mortgage rates all underpin housing demand.

“Supply is highly restricted with the stock of homes available for sale falling further to new record lows. This combination of well-supported demand and tight supply is likely to ensure that house price growth remains relatively strong in the near-term.”

Dragonfly Property Finance chief executive Jonathan Samuels says: “Despite the fall in prices during July, house prices overall are still rising. The dominant narrative within the UK property market continues to be weak supply and strong demand. Demand is strong because of mortgage rates being at record lows, more people in work, low inflation and a generally positive economic outlook.

“The increasing likelihood of an interest rate rise in the not-too-distant future has the potential to recalibrate demand and the market as a whole — but just how we do not know. After so many years of 0.5 per cent rates, even a symbolic 0.25 per cent rise could materially affect demand.

“It could bring the market crashing back to reality with a large thud or borrowers will take it in their stride.”