UK house prices fell in July but tough to attribute the cause during the summer lull

July house price data has now been published by a number of closely followed lenders and housing professionals, and the results aren’t great.

However, while there are clear signs of a market slowdown, the reasons behind it aren’t entirely clear as the traditional summer slowdown is also at play.

Figures from UK lenders Halifax and Nationwide – the top two high street mortgage lenders in the UK – was mixed. Halifax calculated house prices fell 1.0% in July from June while the annual rate of house price growth was unchanged from June at 8.4%.

"There are signs that house price growth is slowing with a deceleration in both the annual and quarterly rates of increase in the past few months,” said Halifax housing economist Martin Ellis. “Overall, it remains too early to determine if there has been any impact on the housing market as a result of June’s EU referendum result.”

Nationwide’s index, meanwhile, shows house prices increased 0.5% in July from June when they rose 0.2%. Compared with July 2015, the lender said house price growth was marginally higher at 5.2% from 5.1% in June.

Nationwide called the price changes “steady” and warned its data still may not show the full impact of any Brexit-related uncertainty due to the way in which it collects its data to calculates the index.

 “It will be tempting for commentators to assign any trends in the coming months to the impact of the referendum,” Nationwide’s chief economist Robert Gardner. “In the near term, increased economic uncertainty may lead to weaker demand for homes.

A third closely watched survey comes from the Royal Institution of Chartered Surveyors (RICS). Its housing market report is constructed differently to that of Nationwide and Halifax. Based on responses from RICS members, the survey indicates how many surveyors assess house prices have risen or fallen and also on how active – or not - buyers and sellers are.

For its part, the RICS survey has had an increasingly weak tone over recent months and the July instalment continues the theme. The survey shows that house price growth slowed markedly in July, as did activity from new buyers and sellers.

Looking ahead, though, house price expectations for the coming three and 12 months edged up from the low levels reported a month earlier “as the dust settles on the EU referendum vote,” the RICS said. Despite some mild improvement, surveyors continue to expect house prices to fall.

These three reports, among others, highlight there is an increasing amount of caution and discussion over how much of an impact Brexit is having on house prices. While it’s pretty clear to say that it is having an impact, typically a negative one, it remains very hard to say how long it will last and whether or not the housing market will suffer more before it begins to improve again.

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