U.K. Housing Momentum Was Easing Before Brexit, Halifax Says

Updated on
  • Lender says property values increased 1.3% in June from May
  • Mortgage lender says it’s too early to tell referendum impact

U.K. house-price growth showed signs of easing in the run-up to Britain’s European Union referendum, according to Halifax.

Prices gained 1.2 percent in the three months to June, down from 1.5 percent in the same period to May, the mortgage lender said in a statement on Tuesday. Values climbed 1.3 percent in June and were up 8.7 percent from a year earlier, to an average 216,823 pounds ($281,000).

While record-low interest rates and strong demand have helped to boost prices, the outlook for Britain’s property market became increasingly uncertain after Britons voted to leave the EU on June 23. With uncertainty about the economy on the rise and the country potentially heading for a recession, that could undermine demand and damp further value gains.

“There is evidence that the underlying pace of house growth may be easing,” said Martin Ellis, an economist at Halifax. “House prices continue to increase, albeit at a slower rate, but this precedes the EU referendum result, therefore it is far too early to determine any impact since.”

Separate data from the Bank of England on Thursday showed mortgage costs falling to a record low. The interest rate on a 75 percent loan-to-value two-year fixed home loan dropped to 1.74 percent in June from 1.88 percent the previous month, the cheapest level since the BOE began keeping the data in 1995. On a 95 percent loan-to-value basis, the cost of a mortgage fixed for the same term dropped to 3.89 percent from 3.92 percent.