07 August, 2017
"A$3 squeeze on spending power, together with the impact on property transactions of the stamp duty changes in 2016 now being realised, along with affordability concerns, appear to have contributed to weaker housing demand", said Russell Galley, managing director of Halifax Community Bank.
Both lenders say the growth in prices is not weaker than it already is due to a lack of homes on the market.
Prices were up just 2.1 per cent in the quarter to July, down from the 2.6 per cent pace recorded in June.
The monthly rise partially offset the 0.9% fall recorded in June, but prices were still down 0.2% in the last three months.
Average house prices in the period were 2.1 % higher than a year earlier, slowing from a 2.6 % increase in June's figures and down from growth of more than 8 % in July last year, Halifax said. This is the fourth successive quarterly fall - the first time this has happened since November 2012.
Britain's housing market has slowed sharply since the vote in June 2016 to leave the European Union, when prices were growing by nearly 10 percent a year.
However, the growth rate is still half of what it was after the Brexit referendum.
A number of surveys have suggested a cooling or relatively stagnant United Kingdom housing market.
Nationally, house prices in July 2017 were 10% above the peak seen in August 2007, with the average price now 42% greater than the low point seen in April 2009. This is the lowest level since 96,740 in October 2016.
Despite these factors, Galley believed the continued low-mortgage rate environment, combined with an ongoing shortage of properties for sale, should help continue to support house prices over the coming months.
Halifax's latest House Price per square metre report shows that London continues to dominate the country's list of the most expensive property locations on a per square metre (m2) basis.
New instructions for home sales fell for the 16th month in a row in June with homes for sale at estate agents at an all-time low, according to the Royal Institution of Chartered Surveyors (RICS).
Halifax said that while the unemployment rate in May was at the lowest level since 1975, the improvements in the jobs market were yet to be reflected in increased demand for property.