Prices in July were marginally (0.8%) lower than at the end of 2009 but are 8.3% above their April 2009 trough. The average house price is now £167,425; 16% below its August 2007 peak.
Housing market activity remains broadly stable. Bank of England industry-wide figures show that the number of mortgages approved to finance house purchase in the three months to June – a leading indicator of completed house sales – were modestly (2%) higher than in the previous quarter, on a seasonally adjusted basis. Activity remains significantly lower than a few years ago with approvals 56% lower in 2010 Quarter 2 compared with 2007 Quarter 2.
Commenting, Martin Ellis, housing economist, said:
"House prices increased by 0.6% in July, reversing the fall in June. Overall, there has been little change in prices during 2010 so far. The mixed pattern of monthly rises and falls over the first seven months of the year is consistent with a slowing market. It is also in line with our view that house prices will be broadly unchanged over 2010 as a whole.
The increase in the number of properties for sale over the past few months, boosted by the recent abolition of HIPs, has relieved much of the pressure that was driving up prices in 2009. Low interest rates and a recovering economy, however, are underpinning demand and continue to support the market."
Stuart Law, Chief Executive of Assetz, on the Halifax House Price Index (July):
“The latest Halifax data shows the UK housing market is back on track following a dip in June as buyers and sellers took stock post-Budget.
“Similarly, the latest Assetz House Price Watch, an amalgamation of the five major UK indices – CLG, Nationwide, Halifax, Acadametrics and Rightmove – reveals strong annual house price growth of 7.2%, with house prices now just 6.8% below their October 2007 peak, rubbishing suggestions that the market is guaranteed to falter in the second half of this year.
“The government’s austerity measures could help dampen house price growth next year, but continued low interest rates and a lack of supply in the property market, particularly the reduction in new build, are likely to continue to drive up prices modestly this side of Christmas and beyond. I still expect to see a modest 5% overall growth for 2010 as the positives continue to outweigh the negatives.”
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