UK house price growth has been through tumultuous times over the last twelve months. Prior to the last year however, house price growth across the country has been quite impressive with double digit gains during most months with the capital city leading the way in most instances. The housing market has seen change occur since the beginning of the year, and not modest change. House prices fell without warning in the month of June bringing the annual rate of growth to the lowest point in four years.

House price growth is a primary factor in determining the short term and potentially some months into the long term. What the housing market is currently seeing is a unique set of circumstances all occurring at the same time and thus putting strain on households and therefore businesses. The economy is in a sense having an effect on residents at the core which is personal spending.

Households are putting a hold on purchasing big ticket items. The drop in house prices is indicative of that and the decrease in prices which took place in June was completely unexpected. According to Halifax, the price of a home dropped 1% during the month to settle at £218,390.

Martin Ellis, a housing economist at Halifax, commented on the latest data, saying: “Although employment levels continue to rise, household finances face increasing pressure as consumer prices grow faster than wages. This, combined with the new stamp duty on buy to let and second homes in 2016, appears to have weakened housing demand in recent months.”