UK house prices grew at their slowest rate in four years between May and July, new figures reveal.
Prices were 0.2% lower over the three month period than they had been in the previous quarter, marking the fourth successive quarterly fall – the first time this has happened since November 2012.
They rose 0.4% in July – an improvement from a 0.9% decline in June, according to a key house price index compiled by Halifax.
Prices in the three months to July were 2.1% higher than in the same period in 2016.
Nonetheless, the annual rate of growth is the lowest since April 2013.
The slowdown in house prices has been a continuing trend since the beginning of this year as buyers see their wage growth fall behind inflation levels, resulting in a squeeze on spending power.
Russell Galley, Managing Director of Halifax Community Bank, said the downward pressure on wages compared to a steady rise in consumer prices meant that some people may be holding back from buying.
Image: The rental market is being buoyed by rising prices outside of London
“This squeeze on spending power, together with the impact on property transactions of the stamp duty changes in 2016 now being realised, along with affordability concerns, appear to have contributed to weaker housing demand,” he said.
“However, a continued low mortgage rate environment, combined with an ongoing shortage of properties for sale, should help continue to support house prices over the coming months.”
The statistics were published as new research from HomeLet suggested the property rental market could be benefiting from slow sales growth, with UK rental prices increasing by an average of 1.1% during the month of July.
The average rent agreed on a new tenancy over the month was £925 HomeLet said.
Within the capital the summer surge was less pronounced – average rents in London fell by 0.6% in July, after a 2.9% drop in June. But rents there still stand at £1,564 a month – more than double the £769 average, excluding London.
HomeLet’s Chief Executive Officer, Martin Totty said: “It’s often been the case in recent times that rents have strengthened over the summer period.
“It’s a time when renters contemplate moving, demand increases, tenancy terms are set, and when the anniversary of the tenancy often occurs.
“This time around it’s regions throughout the country leading the strengthening in rents.
“If we exclude the London region, the average UK rent for a private rental property has hit a new high of £769 a month, up 1.6% on this time last year.”