A study has shown that UK house price growth has hit a four-year low. Halifax, Britain’s largest mortgage lender is responsible for researching the alarming statistics. Despite recent growth in annual house prices, the market has fallen back to its weakest rate since 2013.
House Prices Statistics
Halifax pointed to a variety of factors for the massive decline. Experts say low mortgage rates and approvals combined with a relatively inactive market are among the main culprits. Falling household loans are another reason why the growth between the months of June and July was only 0.4%. Overall, the annual rate hit a low not seen since April 2013, with a mere 2.1% jump in a twelve-month span.
Even worse for homeowners – this was the fourth straight quarter of price declines; something that hasn’t been recorded since November 2012. A shortage of home sales is to blame for this discouraging data. Less than 100,000 sales were finalized between May and June, the lowest level in nearly a year. With an inactive market, the prices of homes currently for sale continue to fall.
Political Upheaval Affecting Housing Market
Right after the Brexit vote in 2016, house prices were increasing at a steady annual rate of 8.4%. The fact that the growth has fallen more than 6% since then shows just how damaging Britain’s exit of the European Union has become. A projection showed that house prices will likely sell for 15% less than they would have if Brexit fell through.
With Brexit negotiations underway, experts believe citizens are doing the smart thing by waiting to invest. UK home buyers are better off holding on to their cash rather than diving into the market right now. Even though rent is increasing and unemployment levels are plummeting, citizens are weary about the country’s political future. A giant pause in the housing market continues to this day across the UK.