SUMMARY

House prices rose 0.1% in June across the country, with annual growth now at 0.6%, according to Nationwide. Most regions have seen no movement in house prices over the last year. The exceptions are Wales and the West Midlands, which saw price rises, and the South East, which saw falls. London had a surprisingly strong Q2, up 0.6% since Q1, its strongest quarter since Q1 2017, but prices are still down 1.9% on an annual basis, in line with our forecast.

Supporting these relatively stable prices is the RICS Survey, in which far fewer surveyors reported price falls than in recent months. But the majority are still reporting price falls. More surveyors also reported rising numbers of both new instructions and new enquiries. The majority still report falling numbers, but both measures are at their most positive since last summer. Transaction numbers have also shown some signs of stabilisation from their recent downward trend according to early indications. Further months of data are needed to confirm this.

A further sign of stable market activity is the continued resilience of the mortgage market, with the continued rise in the number of approvals. Loan to Value ratios have been rising, with the national average LTV for first time buyers now at 78%, its highest ever post-GFC value. This shows that banks are keen to continue lending. Oxford Economics is now not expecting a base rate rise until May 2020, amid wider economic uncertainty, and mortgage interest rates have stopped increasing. This maintains the affordability of mortgages and supports house prices.