September 6, 2019 8:58:01 AM
House prices have “barely changed” over the past six months – and edged up by just 0.3% in August – according to an index.
Across the UK, property values in August were 1.8% higher than in the same month a year earlier, with the average house price standing at £233,541, Halifax said.
In March, the average house price was £233,458 – a difference of just £83.
Russell Galley, managing director, Halifax, said: “There was no real shift in house prices in August as the average property value grew by just 0.3% month on month.
“This further extends the predominantly flat trend we’ve seen over the last six months, with the average house price having barely changed since March.
“While ongoing economic uncertainty continues to weigh on consumer sentiment – with evidence of both buyers and sellers exercising some caution – a number of important underlying factors such as affordability and employment remain strong.”
He added that the housing market “continues to show a degree of resilience for the time being”.
While events in the wider economy will influence the housing market, he said: “We should also not lose sight of the fact that the single biggest driver of both prices and activity over the longer-term remains the dearth of available properties to meet demand from buyers.”
The way the Halifax index is calculated has now been updated, following previous methodology used for more than 30 years, the bank said.
Work to update the index has been ongoing since last year.
Economists had recently pointed out that some house price jumps seen in Halifax’s index were much stronger than other similar studies, which showed a more subdued picture.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics said: “Halifax’s house price index now echoes the relatively sombre tone of other measures.
“The index is substantially less volatile and points to significantly slower growth in house prices than before…
“We continue to expect house prices to rise at around a 2% year-over-year rate over the coming months, as falling mortgage rates and momentum in nominal wage growth counterbalance the impact of Brexit and political uncertainty on buyers’ confidence.”
Howard Archer, chief economic adviser to EY Item Club said: “The Halifax has adjusted its house price index which brings it much more in line with other measures.
“Previously, the Halifax measure had become very much an outlier, delivering a much higher annual rate of house price increase and often more volatile month-to-month movements.”
He continued: “Should the UK leave the EU with a deal on October 31, we believe reduced uncertainty and modestly improved economic activity could see house prices rise by around 2% in 2020.
“If the UK leaves the EU without a deal on October 31 – or at a later date – we believe house prices could quickly drop around 5%.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Transactions remain fairly steady as those buyers and sellers who have to get on with things continue to do so.
“Deals are being done and early signs are that business could be brisk this autumn even as Westminster continues to argue over Brexit.”