- REUTERS/Toby Melville
LONDON – Asking prices for UK homes fell by 0.4% in June, according to property website Rightmove, the first price decline in the month since 2009.
June usually registered a seasonal price rise but saw prices dip slightly, with political instability, inflation, and wage stagnation blamed for the drop. Lower prices in London also dragged.
The average UK house price was 1.8% higher than in June last year, the smallest annual increase since 2013.
Rightmove’s figures were based on properties advertised between May 14 and June 10, and therefore largely cover the weeks before the June 8 general election where Theresa May unexpectedly lost her parliamentary majority.
While individual month-on-month indexes are subject to volatility, year-on-year trends point to a major loss of momentum in the UK housing market. Every major house price index indicates that prices have levelled since the referendum after years of runaway growth.
Rightmove said that house prices in most areas of England and Wales increased, but falls in the south-east, led by a 2.4% drop in London, pushed the index negative.
“The price of property coming to the market had increased in June in every year since 2009, so buyers’ confidence has clearly been affected by inflation outstripping their pay packets and current political events,” Rightmove director Miles Shipside said.
Figures published last week showed that consumer inflation jumped to 2.9% in May while wage growth remains stagnant, placing a big squeeze on households’ disposable income.
Russell Quirk, chief executive of property website eMoov, said that political instability appears to have driven the dip in prices. He said: “Anyone that claims the political landscape has no direct impact on the UK housing market need only to look at the latest index from Rightmove to be told otherwise.
“That said, it is probably unfair to be drawing comparisons to the market during the peak of the credit crunch as we are in a much steadier climate then compared to now. Although price growth is likely to remain stagnant for the rest of the year, it is unlikely that we will see any notable dips, perhaps a marginal adjustment, if any.”