July data suggest UK house market slowing: Halifax

British house prices continued to rise strongly in July, but more slowly than in several recent months, according to a survey that suggests Bank of England rate rises may be calming the buoyant property market.
Britain's largest mortgage lender Halifax said house prices rose 1.3 percent in July, compared with a rise of 1.2 percent in June, but well below the average monthly increase of over 2 percent during the preceding six months.
"The house price gains in June and July represent a clear step down from the 2.0 percent plus monthly price growth seen, on average, in the preceding six months. These figures, along with other housing indicators, suggest that the market may be slowing," Martin Ellis, Halifax Chief Economist, said.
The Bank of England, which begins a two-day rate-setting meeting later on Wednesday, is unlikely to be deterred from hiking interest rates on Thursday, as expected, by the data.
"This is a positive sign (of cooling) but the pressure is going to remain on the BoE in the near term," said Robyn Barnett, economists at UBS.
Nonetheless, the Bank may be relieved the Halifax figures do not confirm the rapid acceleration in house prices reported by the Nation-wide Building Society in July. Nation-wide said prices rose 2.1 percent in July.
The Halifax index follows a survey from property website Rightmove.co.uk earlier on Wednesday, which showed British house prices fell a non-seasonally adjusted 0.5 percent in the three weeks to the end of July.
Economists expect the BoE, which has recently become increasingly vocal about the risks that unsustainable house price inflation poses to the economy, to raise interest rates 25 basis points to 4.75 percent on Thursday.
That would be the fifth quarter point rise since November.
Halifax said its seasonally-adjusted index stood 22.1 percent higher in the latest three months compared with a year ago, compared to 21.5 percent in the three months to June compared to a year earlier.
Halifax said higher interest rates would continue to limit price rises in the coming months.