Raymond added that it will be important to keep an eye on whether prices decline in the September to November period, “where demand is typically higher than the summer months and will give us better evidence of the potential for a looming house price correction, especially in London”.
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Housing prices slipped 0.2 percent, after dropping 1.1 percent in July, data released by the mortgage lender Halifax showed in a statement on Wednesday.
The quarterly rate of increase has been on a downward trend over the past six months since peaking at 3.0% in February, according to the data.
Activity in the housing market has dropped off since the early months of the year, when investors brought forward purchases to beat new stamp duty rates for second homes introduced on 1 April.
British house price inflation eased at a faster-than-expected pace in August to the lowest level in almost three years, survey data from the mortgage lender Halifax revealed Wednesday. “There are also signs of a softening in sales activity”.
“The slowdown in the rate of house price growth is consistent with the forecast that we made at the end of 2015”, Halifax economist Martin Ellis said.
House-price gains outpacing earnings is expected to constrain demand, curbing price growth, he said.
House prices have continued to rise following European Union referedum vote but the rate of growth has softened.
“With both supply and demand falling, the result is a benign stalemate – with average prices creeping up as the number of sales falls”.
The Halifax, part of Lloyds Banking Group, said that the average home in the United Kingdom cost £213,930.
“Looking ahead, the forthcoming stagnation of households’ real incomes, as inflation picks up and firms moderate hiring plans, will subdue consumer confidence and constrain prices”, said Samuel Tombs, economist at Pantheon Macroeconomics. But this is also a slowdown from July’s annual rate of 8.4%.
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Russell Quirk, founder and CEO of eMoov.co.uk, said: “Today’s figures from Halifax show house prices have cooled a further 0.2% from the 0.1% drop seen in July”.
