UK house prices drop for the first time since January

The average price of a home is now £260,358

House prices in the UK fell by 0.5% in June compared to the month before, according to Halifax, the mortgage lender.

It is the first time since January that house prices dropped.

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The yearly rate of growth is down to 8.8% from 9.6% in May, which was a 14-year high. This comes stamp duty will gradually be phased out until September.

The average price of a home is now £260,358, down by £1,284 from the month before.

Russell Galley, managing director at Halifax, commented on the phasing out off the stamp duty holiday:

“With the stamp duty holiday now being phased out, it’s was predicted the market might start to lose some steam entering the latter half of the year, and it’s unlikely that those with mortgages approved in the early months of summer expected to benefit from the maximum tax break, given the time needed to complete transactions.”

“That said, with the tapered approach, those purchasing at the current average price of £260,358 would still only pay about £500 in stamp duty at today’s rates, increasing to around £3,000 when things return to normal from the start of October.”

Chris Hutchinson, CFO & Co-Founder of Canopy, says the stamp duty holiday was never going to be a permanent solution:

“House prices couldn’t keep on rising forever, and it seems that some of the heat is finally coming out of the market as the stamp duty holiday comes to an end. But while the temporary tax freeze got some buyers on the front-foot, it was never a long-term solution and barriers to homeownership remain. What’s more, we’re now at a point where the disparity between average salary and average asking price has led Generation Rent down an incredibly difficult path to future homeownership.”

“Nobody should feel that they are compelled to face a lifetime of renting. But with renters plugging thousands into the rental system each year, this money can feel like a waste. We should be making rent payments count towards people’s credit rating, to make it easier and quicker to secure an affordable mortgage when the time comes to buy. Instead of propping up first-time buyers with temporary support measures, it could make far more difference if we get Generation Rent equipped to buy from the very beginning of their rental journey.”

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