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UK house prices fell in July

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Economic and political uncertainty are weighing heavily on the housing market
UK house prices fell in July

Average UK house prices dropped again in July, following a fall in May, according to Halifax.

The lender said the average property price fell by 0.2% last month to £236,120, representing an increase of just 0.4% over the previous three months.

The annual change figure looks more robust at 4.1%, however the lender pointed out that this was due to an unusually slow July in 2018, skewing the year-on-year comparison.

Russell Galley, managing director of Halifax, said: “It’s worth remembering that, while economic uncertainty continues to weigh on the market, the overall trend actually remains one of comparative stability, with average prices down by less than £600 over the last three months.

“We have seen a reported drop off in the number of properties sold during the early months of summer, which may lead some to speculate a downturn is on the horizon. However, new buyer enquiries are up, and favourable mortgage affordability – driven by low interest rates and strong wage growth – should continue to underpin prices for the time being.

“In the longer-term, we believe there is unlikely to be a step change in market activity until buyers and sellers see some form of resolution to the current economic uncertainty.”

Andrew Montlake, managing director of Coreco, added: “The quarterly rate of growth, at 0.4%, is the most accurate portrayal of the market, namely its head is just above water.

“Comparative stability is a fair summary, as the economic fundamentals remain strong, mortgage rates cheap and low supply is propping up house prices.

“Equally, with the odds of no-deal shortening by the day, it’s crunch time for UK bricks and mortar. The impact of no-deal on the UK property market is thick in the air.

“The consensus appears to be that the property prices will suffer if we exit the EU without a deal. What we can be sure of is that, with so many unknowns in play, most households will sit tight during the next two to three months and transactions tail off.”

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