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‘Downward Pressure’ on House Prices

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House prices were down in June for the fourth month in a row, and the prospect for the next few months is for a ‘continuation of the recent modest downward trend’, mortgage lender Halifax said this week.

Average house prices were down 0.1 per cent on the month, and 0.9 per cent on the quarter, but were still 2.5 per cent higher than a year ago. Encouragingly, there was a ‘surge’ in new mortgage enquiries – although June is expected to see higher than average enquiries. 

June House Price Index results were notable for showing falls for four consecutive months for the first time since 2010 – when the housing market was struggling after the shock of the global financial crisis, said Halifax managing director Russell Galley.

“Activity levels bounced back strongly in June, which is typically the busiest month for mortgage activity in the UK. New mortgage enquiries were up by 100% compared to May, and with prospective buyers also revisiting purchases previously put on hold, transaction volumes rose sharply compared to previous months.

‘However, whilst encouraging, it remains too early to say if this level of activity will be sustained.

‘Come the autumn, the macroeconomic landscape in the UK should be clearer and the scale of the impact of the pandemic on the labour market more apparent. We do expect greater downward pressure on prices in the medium-term, the extent of which will depend on the success of government support measures and the speed at which the economy can recover’.

The June Halifax House Price Index put the average price of a home at £237,616.