House prices stabilizing

Average UK property prices fell by 0.6% in June.

According to the latest Halifax House Price Index, this was the second consecutive monthly decline, following a decrease of 0.5% in May.

However, looking at longer-term trends, prices in the second quarter of this year are just 0.1% lower than the first quarter, indicating stabilization rather than freefall in the housing market.
According to Halifax data, the average UK property is now worth £166,203.

Martin Ellis, housing economist at Halifax, said:


"This continued the slowdown in house price growth since the beginning of the year following the moderate recovery in prices during much of 2009. This pattern is in line with our view that house prices will be broadly unchanged over 2010 as a whole.


"A shortage of properties for sale in 2009 contributed to an imbalance between supply and demand and was a key factor driving up house prices last year. An increase in the number of properties available for sale in recent months has helped to reduce the imbalance, relieving the upward pressure on prices. The low level of interest rates, however, continues to support housing demand."


Nigel Lewis, analyst at property website FindaProperty.com, commented:

"It is no surprise that the latest Halifax house price index shows a dip in house prices; our own figures show that there has been an influx of stock over the past few months which has served to drive prices down.

"There are currently 23% more properties for sale on our site than there were a year ago and this imbalance between supply and demand is now affecting pricing.

"We are reverting back to a buyer's market and therefore sellers must vie for their attention with more competitive prices."