Only the brave bet against bricks and mortar long term

For some time now, the UK's property market has lacked both energy and direction. June, if the latest Halifax House Price Index is anything to go by, delivered much of the same. The market is in a protracted state of limbo.

House prices snuck up a fraction last month, by 0.3%, but the quarterly figure, a better representation of the market, showed a decline of 0.7%. On an annual basis, average house prices returned 1.8%, down from 1.9% in May.

If there's one word that accurately describes the property market right now, it's torpor. While the jobs market may be strong and mortgage rates still highly competitive, many households continue to feel the pinch and are wary of the potential fallout from Brexit.

Many prospective sellers, meanwhile, are very aware that it's a buyers' market at present and that unless their property is realistically priced, it won't be selling any time soon. As a result, a significant proportion are choosing to sit it out rather than take a hit.

Another Sword of Damocles hanging over the head of anyone considering buying or selling is whether rates are going up this year. At the beginning of 2018, a rate rise or even two was a cast-iron certainty.

But following the first quarter GDP data and multiple other weak datasets in the second quarter of 2018, it was suddenly off the cards all over again. Now, however, following last week's strong construction and services sector data, an August rate rise is back on the table.

This in itself is likely to dampen activity levels further during July, as people wait to see what's happening on the interest rate front. Because of this, expect house prices to continue idling along in their current rut. July could make June look dynamic.

As ever, of course, the lack of homes on the market and shortage of properties more generally will prevent prices going into free fall. With supply as tight as it is, a material decline in house values is simply not plausible.

The irony is that there is a lot of development activity at present. Much of this is increasingly taking place away from the capital, in the major regional hubs where there is perceived to be more value (and financial wiggle room).

Residential developers are betting that the market will bounce back and, over time, it's hard to believe it won't. If there's one thing history has taught us, it's that house prices always rise over time. Only the brave bet against bricks and mortar long term.