UK house price inflation steadies on annual basis, but declines slightly on month

The United Kingdom house price inflation (HPI) remained steady during the month of July, compared to a year ago period; however, it declined slightly on a monthly basis, a private survey results showed Friday.

The Halifax house price index rose 8.4 percent year-on-year in the three months to July, same as in the June quarter, and the lowest since July 2015, data released by Lloyds Banking Group subsidiary Halifax showed Friday. Economists had expected acceleration to 8.8 percent.

On a month-on-month basis, the house price index declined 1 percent in July, marking its first fall in three months. In June, the measure rose 1.2 percent. Economists were looking for a 0.2 percent slump. Compared to the previous three months, house prices rose 1.6 percent in the three months to July.

"There are signs that house price growth is slowing with a deceleration in both the annual and quarterly rates of increase in the past few months. Nonetheless, the current rates remain robust," said Martin Ellis, Economist, Halifax Housing.

Further, the average price for a British house fell to GBP 214,678 from GBP 216,726 in the previous month. A year ago, the price was GBP 199,117. The report mentioned that the proportion of home owners dropped from 72 percent in April 2003 to 58 percent this year in Greater Manchester, while there were also double-digit falls in West Yorkshire, the metropolitan area of the West Midlands and outer London.

Meanwhile, the Bank of England cut interest rates by 25 basis point to a historic low of 0.25 percent, from 0.5 percent. This further suggested that house prices could fall further, taking an estimated GBP22 off the monthly mortgage bill of those with tracker deals.