"Housing demand continues to be supported by an economic recovery that is gathering pace, with employment levels growing and rising consumer confidence, although real earnings growth remains sluggish"
- Stephen Noakes, Halifax's mortgage director
U.K. house prices declined marginally in June, the fourth monthly fall since last December, but the underlying trend suggests the rapid market upturn still has steam, despite signs that affordability restrictions are beginning to cool the market. The Halifax said prices were down by 0.6% between May and June, whereas on the quarterly basis, prices in the second quarter rose 2.3% compared to the previous three-month period. Britain's largest mortgage lender said the quarterly increases had remained unchanged between 2.0% and 2.3% since June 2013. The average house price across the UK is now £183,462, according to the Halifax. Last week, the Nationwide Building Society reported prices had jumped by 11.8% in the last year, and were now higher than at the peak of the market in 2007.
However, in June, the BoE's Financial Policy Committee took steps to try to prevent the housing market from overheating. There have been some indication that the market is beginning to cool, with BoE data showing lenders approved the fewest number of mortgages in May in almost a year as affordability rules implemented in April began to have an effect. Halifax added that the U.K. economic recovery would continue to spur housing demand, along with increasing employment and growing consumer confidence. However, it stressed that real earnings growth remains sluggish.
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