The latest Halifax House Price Index shows average house prices in June dipping slightly,  for the first time since January.

Halifax says the average house price is now £260,358, a 0.5% drop on the previous month. However, the annual level of house price inflation is still standing at 8.8%.

Russell Galley, Managing Director of Halifax said:

“Government support measures over the last year have helped to boost demand, particularly amongst buyers searching for larger family homes at the upper end of the market. Indeed, the average price of a detached home has risen faster than any other property type over the past 12 months, up by more than 10% or almost £47,000 in cash terms. At a cost of over half a million pounds, they are now £200,000 more expensive than the typical semi-detached house.

“That power of homemovers to drive the market, as people look to find properties with more space, spurred on by increased time spent at home during the pandemic, won’t fade entirely as the economy recovers.

“Coupled with buyers chasing the relatively small number of available properties, and continued low borrowing rates, it’s a trend which can sustain high average prices for some time to come.

“However, we would still expect annual growth to have slowed somewhat more by the end of the year, with unemployment expected to edge higher as job support measures unwind, and the peak of buyer demand now likely to have passed.”

Housing market analyst, Anthony Codling, sees no sign of prices diminishing in the near term:

“One month of falling house prices does not buck a trend and that trend, for now, is still up not down. For some, the easing of lockdown and the prospect of a summer holiday may take some heat out of the housing market, but others will be keen to move before the end of September and cathartically put COVID behind them.”

Lucy Pendleton of James Pendleton Estate Agents said:

“Property supply is still failing to keep up with demand, with some buyers holding off marketing their property because they cannot see anywhere to move to, creating a vicious cycle of low supply and consequently causing intense up-bidding on the most desirable properties.”

James Forrester, MD of Barrows and Forrester in Birmingham,  commented:

“What goes up, inevitably comes down again and it’s simply unrealistic to expect house prices to continue climbing at such an unheard-of rate forever. Of course, the tapered end of the stamp duty holiday will bring about a natural market correction, but the proof in the pudding is the annual rate of growth which sits at nearly nine per cent.

“The market remains in a very strong position and while we may see the rate of growth continue to cool, this is a world away from a substantial drop in market values.”

Jonathan Hopper, CEO of Garrington Property Finders, sees change in the market already under way:

“With house prices in many areas rising many times faster than people’s earnings, such breakneck price inflation was always going to be unsustainable. So for it to have receded from its high tide mark is welcome news for buyers in the hottest regions who may have seen their ideal property being priced out of reach.

“The pace of the market – in which good homes in desirable areas are being snapped up within days or even hours – has also made it a victim of its own success, with some would-be sellers holding off on entering the market for fear of their home selling before they find a suitable new home to move to.

“As supply starts to improve, the market should achieve a better equilibrium and price inflation is likely to cool further.

“On the front line we’re already starting to see buyers adopt a more pragmatic view on pricing, and a growing number of sellers are having to adjust their prices to reflect the change in market dynamics.”