The UK housing market remained stable in July, with very little change on the previous month as transaction levels and values remained reasonably constant. This was borne out by key indicators from the July data, including:
- Average purchase price remained broadly unchanged, with an average increase of £73 month on month
- Marginal change in the average remortgage loan with less than a 0.5% increase month on month
- Average First Time Buyer property purchase price decreased slightly (0.3%) month on month
Mortgage Advice Bureau data is based upon mortgage applications, therefore this provides a good snapshot of consumer activity in one of traditionally the quieter months of the year.
The data from July suggests that there has been a slight cooling in prices in some areas and also in some sectors, for example at the entry level of the market with the average First Time Buyer paying less for their homes in July than they did in the previous month, most possibly due to a reduction in competition with investors over the same type of property.
Where values have cooled month on month in a region, for example East Midlands, East Anglia and the South East, prices are not moving dramatically which should provide reassurance for many. Realistically, a downward movement in prices over the last month or so is likely to indicate that those selling are pricing realistically in order to secure a buyer, given that many of those now looking for property are securing their mortgage prior to starting their search and, therefore, have a budget which is not flexible. Mortgage affordability has become more stretched, with the average rise in incomes below that of Consumer Price Inflation, therefore the impact on household income in line with house price rises means that there is a finite limit in terms of what buyers can realistically borrow, and this is more likely to be impacting on any movements in terms of pricing than any other factor currently.
