Annual house price growth slowed in July

The house price index showed that prices rose at an annual pace of 7.9 per cent last month which was down from 9.6 per cent in June.

However, house prices suffered the largest monthly drop since April 2014, where prices fell by 0.6 per cent.

This makes the average price of houses or a flat across the country back down to £198,883.

However, rival lender Nationwide produced different figures, and said earlier this week that the rate of house price growth increased to 3.5 per cent in July, contrasting to 3.3 per cent a month earlier.

Rob Weaver, director of property at residential investment platform Property Partner, says it is difficult to read into the house price index.

“It’s difficult to have too much faith in house price indices when they conflict on price growth in the same month. Nationwide showed a price rise in July, Halifax are saying that average prices have fallen.This conflicting data shows the volatility of these indices over short periods. The general trend over a more reliable period of three months is steady growth.”

“What Nationwide and Halifax don’t disagree on is the shortage of stock on the market. When the housing stock is there it sells, but where are the sellers?

“This continued lack of stock points to a housing market that remains short on confidence and still not fully functioning.Halifax reports that confidence is higher than at the beginning of 2015, but the lack of supply implies confidence is not where is need to be. In terms of activity, we are likely to see a drop off during these summer months. It will be interesting to see what happens in the Autumn and if supply levels start to pick up. Right now we have reasonably good market conditions, with a healthy economy, wage growth, low interest rates and a cluster of great mortgage deals. But confidence in the market is fragile and easily upset with interest rate rises on the horizon.”

Nationwide and Halifax base their data on mortgage approvals whilst use a “mix-adjustment” in their methodology, which involves a different weighting of the figures, to reflect different types of property being sold in any month, and more sales in a particular region of the UK.