House prices fall for the fourth month in a row – but new mortgage applications surge

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HOUSE prices have fallen for the fourth month in a row but new mortgage applications have surged, according to a property index.

It’s the first time since 2010 that property prices have continued to drop for this many consecutive months, reports research by Halifax.

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Despite house prices falling by 0.1 per cent in June compared to May, the number of buyers applying for a mortgage shot up by 100 per cent.

June is typically the busiest month of the year when it comes to mortgage applications.

It’s a sign that the property market is slowly picking up, despite almost coming to a standstill during the coronavirus lockdown.

It comes as the chancellor is expected to announce a six-month stamp duty holiday to kick start the economy via the housing market.

The temporary relief would see buyers pay nothing for the first £500,000 of a property’s value in England and Northern Ireland.

But managing director at Halifax, Russell Galley, warns that “whilst encouraging, it remains too early to say if this level of activity will be sustained”.

House prices fell by 0.3 per cent in March, 0.6 per cent in April and 0.2 per cent in May.

The last time house prices fell for as many months was in the aftermath of the global financial crisis.

Average house prices for the month were £237,616, down from £237,855 in May.

Last week, Nationwide reported a 0.1 per cent fall in house prices compared to the same time in 2019 – the first annual drop in eight years.

But Halifax’s index found that house prices were actually up 2.5 per cent compared to the same time last year.

Mr Galley said he expects house prices to continue to fall until the autumn when the true economic impact of the pandemic is revealed, when the government’s furlough scheme officially comes to an end.

Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors (Rics), said: “On the one hand, prices have fallen for the fourth consecutive month but new mortgage inquiries are surging as buyers and sellers emerge from lockdown.

“The direction of travel in coming months will depend on the degree of support offered by the government and how quickly the economy can recover when furlough in particular is withdrawn.

“Another factor of course now is stamp duty and any other measure introduced by the chancellor to increase activity.

“Certainly, we are starting to see supply increasing and greater realism in sales agreed so do not expect prices to rise sharply in the near term.”

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