Stagnation in house prices over past year due to political uncertainty say experts

Halifax managing director Russell Galley
Halifax managing director Russell Galley

HOUSE PRICES have stagnated throughout this year as the ongoing political uncertainty and consumers’ fragile confidence in the economy have undermined the market, property experts have warned.

A study published by the Halifax bank yesterday revealed that prices have “barely changed” during the past six months.

The index showed property values across the UK in August were 1.8 per cent higher than in the same month a year earlier, with the average house price standing at £233,541. In March, the average house price was £233,458 – a difference of just £83.

Halifax managing director Russell Galley said: “There was no real shift in house prices in August as the average property value grew by just 0.3 per cent month on month. This further extends the predominantly flat trend we’ve seen over the last six months, with the average house price having barely changed since March.

“While ongoing economic uncertainty continues to weigh on consumer sentiment – with evidence of both buyers and sellers exercising some caution – a number of important underlying factors such as affordability and employment remain strong.”

He added the housing market “continues to show a degree of resilience for the time being”, with the “single biggest driver” for both prices and sales remaining a dearth of available properties to meet demand from buyers.

The way the Halifax index is calculated has now been updated, following previous methodology used for more than 30 years.

Work to update the index has been ongoing since last year.

Economists had previously pointed out that some jumps in house prices which were seen in Halifax’s index were much stronger than other similar studies, which showed a more subdued

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Samuel Tombs, chief UK economist at Pantheon Macroeconomics research consultancy, said: “Halifax’s house price index now echoes the relatively sombre tone of other measures.”