Halifax: UK house prices down in July
The lender reported that average prices fell 0.6% month-on-month in July, following on from increases of 0.8% in June and 0.4% in May.
House prices have now fallen in five of the last nine months according to the Halifax, while they have risen in four.
House prices were down by 0.6% year-on-year in the three months to July, while they were flat in the three months to July compared to the three months to April.
On the Halifax measure, house prices stood at £161,094 in July, which is 4.4% below the last peak of £168,593 in April 2010.
Halifax Housing Economist Martin Ellis said prices continued to fluctuate on a monthly basis, but at a national level, house prices had been very stable over the past year or so.
“This can largely be explained by the static nature of supply and demand conditions during this period,” he said.
“Looking forward, we expect little change in prices over the remainder of 2012 so long as the economic climate in the UK does not worsen substantially,” Ellis added.
Monday’s figures tally with those from Nationwide, which reported house prices falling 0.7% month-on-month in July, and the Bank of England, which said that mortgage approvals fell to an 18-month low in June.
Dr Howard Archer, Chief UK Economist at IHS, said the all-time high for house prices on the Halifax measure was £199,612 in August 2007.
This put house prices in July 2012 19.3% below the August 2007 all-time high.
“We expect house prices to trend lower over the rest of 2012 and very possibly beyond, in the face of weak activity, low and fragile consumer confidence, muted earnings growth and high unemployment,” he notes as well.
“We expect house prices to fall by at least 3% from current levels.”
Blerina Uruci, an analyst at Barclays Capital, said despite the monthly stability, the underlying trend was weak.
She cited Halifax’s figures showing that when comparing three month figures with the same time the previous year, prices had fallen since November 2010.
The analyst highlighted the volatility in this data series, telling clients “for this reason, the BoE’s preferred measure of house prices is the average of the 3m/3m rate of increase of the Halifax and the Nationwide surveys”.
“This measure showed prices fell by 0.5% in July, the tenth consecutive decline and consistent with continued weakness in the housing market.”