Investment Property Growth Rises in Second Quarter

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The second quarter of the year saw property price growth rise by 5.7 per cent when compared to the corresponding quarter in 2018.

The latest Halifax House Price Index has shown that house prices rose by 2.4 per cent over the second quarter of 2019 and by 5.7 per cent compared with April to June in 2018.

The latest rise largely mirrors the 2.5 per cent growth and 5.2 per cent annual growth seen in the first quarter of the year.

Halifax cautioned however that the annual increase was flattered by weak price growth in the corresponding period in 2018. In monthly terms, prices fell by 0.3 per cent after a rise of 0.4 per cent in May.

Other measures of house prices have shown smaller increases than Halifax show in the second quarter – with prices in London falling – but have also suggested a bottoming out in the market after a slowdown linked to worries about Brexit.

Halifax’s measure of annual house price growth had been growing by nearly 10 per cent a year at the time of the 2016 referendum.

Britain secured an extension to the deadline for its departure from the European Union until October 31 but many investors remain worried about the possibility of a no-deal Brexit, something the two contenders to become prime minister say they are prepared to do if necessary.

Russell Galley, managing director at Halifax, said: ‘Average house prices dipped marginally in June, falling by 0.3 per cent, to stand at £237,110. This extends the largely flat trend we’ve seen over recent months.

‘More generally the housing market is displaying a reasonable degree of resilience in the face of political and economic uncertainty. Recent industry figures show demand looking slightly more stable, with mortgage approvals ticking along just above the long-term average.

‘One of the major restraining factors on the volume of transactions in the market continues to be the very low level of stock for sale. With the ongoing lack of clarity around Brexit, people will be looking for more certainty in the coming months, both to encourage them to list their property and to create the confidence needed to encourage buyers.

He concluded: ‘Of course, the likelihood of continued historically low mortgage rates will underpin prices in the near term.’

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