UK house price growth fell to a four-year low in June

 
Emma Haslett
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A lack of stock will keep prices high, the market insists (Source: Getty)

UK house price growth has undershot expectations again, falling 0.1 per cent in the three months to June, new figures have shown.

Halifax's house price index showed the average price fell one per cent between May and June while annual growth fell to a four-year low of 2.6 per cent, disappointing economists who had expected 3.1 per cent growth.

The average price fell from £220,515 in May to £218,390 in June. However, prices remain nine per cent above their pre-recession peak in August 2007.

Read more: Double, double, London house prices bubble?

The figure is another sign of weakening in the UK's housing market. Earlier this week a group of economists warned the UK was due for a "significant correction", with prices poised to fall as much as 40 per cent.

Martin Ellis, housing economist at Halifax, suggested rising inflation has put off prospective buyers.

“Although employment levels continue to rise, household finances face increasing pressure as consumer prices grow faster than wages. This, combined the new stamp duty on buy to let and second homes in 2016, appears to have weakened housing demand in recent months," he said.

But he added that house prices are likely to stay strong in the coming months.

“A continued low mortgage rate environment, combined with an ongoing acute shortage of properties for sale should help continue to underpin house prices,” he said.

"[A crash] remains very unlikely," added Russell Quirk, chief executive of online estate agent Emoov.

"The market is not dead or running on the life support of easily obtained credit and has suffered more of a grazed knee than a fatal injury.

"A momentary blip is certainly not substantial enough to label as a trend and those that have, are doing so prematurely.

"Resilient levels of buyer demand, heightened by a paltry supply of stock and coupled with historically low interest rates, will continue to fuel house price growth in the medium and long term."

Read more: Help to buy has built up housebuilders - but it can break them down, too

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