Halifax: Housing market faces 'significant headwinds'

The UK housing market faces "significant headwinds" in the coming months, according to the Halifax.

The Lloyds-owned lender's latest house price index shows the average house price rose by 1.2% in June compared with the previous month, but it said demand will become increasingly constrained.

Low pay rises, higher taxes and inflation are all contributing factors, with the current low base rate ensuring a degree of stability in the property market.

Martin Ellis, Halifax’s housing economist, said: “Low interest rates, an increase in the number of people in employment and some tightening in market conditions earlier in the year are likely to have been the main factors behind the recent improvement in price trends.

"A slowly improving economy and sustained low interest rates should help to support broad stability in the market over the coming months.

"The market is, however, likely to continue to face significant headwinds which are expected to constrain housing demand."