House Prices Continue to Rise
House Prices Continue to Rise Despite Crash Rumours
The latest figures released by Halifax in July show that house prices are still on the rise. July’s figures show that house prices rose by 0.1% during the month, which is the smallest level of increase over the course of the past 15 months.
House Prices Rise, But at a Slower Rate
Since July 2013, house prices have risen by 10.6%, which is slightly less than the rate of inflation from the 12 months previous, which stood at 11.8% in comparison with 2012.
Now more than ever, it looks like the supply of new homes will be crucial to determining future house prices. The average cost of a home in the UK now stands at £188,949, and it looks like we could have a shortfall of homes in the coming years; a position which is agreed upon by Shadow Housing Minister Emma Reynolds.
A Fall in Mortgage Approval Rates
This slight slowdown in the housing market compared with last year was not entirely unexpected due to a fall in mortgage approval rates during July. In April, new rules were brought in to ensure that banks and building societies undertook more rigorous checks on borrowers before they granted any loans.
Confidence in the Market Stumbles
Overall, the Halifax Confidence Tracker now shows that there is a balance of +25 who think that now is a good time to sell a property; this is up from +12 who felt the same in the first quarter of the year before.
In contrast, at present, only +5 now think that now is a good time to buy, a sharp decrease from the +35 who felt the same during the first quarter of last year. Some analysts now believe that the housing market has reached a tipping point of customer confidence, especially because of crash rumours in some sectors of the market.
Craig McKinlay, mortgages director at Halifax said that "over the past two years consumer confidence has continued to grow, however it appears that we''ve reached a tipping point with the equilibrium between buyers and sellers much more out of sync".
The conclusions from July’s data will make the August release incredibly interesting, especially due to how much house prices can fluctuate between months. Likewise, amidst reports that mortgage approval rates could be set to rise, it remains to be seen what impact this can have on consumer confidence in the market.
Posted by Mark Readings - 28/08/2014 23:37:54
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