House prices in the UK fell by 1% in June, the largest monthly fall since January, according to Britain's largest lender, the Halifax. It brings the average price of a house or flat down to £218,390. The rolling quarterly figure, which measures changes over the previous three months, fell by 0.1%. It is the third month running that figure has fallen - the first time that has happened since November 2012.
Measured on an annual basis, the growth in house prices eased from 3.3% in May to 2.6% in June, the lowest increase for four years. The Halifax said one reason for the slowdown was the fact that consumers were increasingly being squeezed as increases in incomes failed to keep up with inflation. "Although employment levels continue to rise, household finances face increasing pressure as consumer prices grow faster than wages," said Martin Ellis, Halifax's housing economist. "This, combined with the new stamp duty on buy-to-let and second homes in 2016, appears to have weakened housing demand in recent months."
However monthly figures - and to a lesser extent quarterly figures - can be volatile. One economist said he did not expect a continuing fall in prices over the rest of the year.
"The dip in Halifax's measure of house prices—which dragged year-over-year growth down to its lowest rate since May 2013—probably doesn't mark the start of a sustained fall in prices," said Samuel Tombs, chief UK economist at Pantheon Macroeconomics. "The index is volatile even at the best of times, and Nationwide reported a 1.1% month-to-month rise in its similar measure of prices in June. The underlying trend in prices probably is flat." The number of properties being sold has also held up relatively well. Figures from HM Revenue and Customs show that the number of sales in the three months to May was 1% higher than in the previous quarter.
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