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Halifax: UK house prices ‘tread water’ in August

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House prices declined by 0.4% in August, the second successive monthly fall, reported Halifax.

Its house price index showed that these two increases largely cancelled out the rises of 0.4% and 0.8% respectively recorded in May and June.

Martin Ellis, housing economist at Halifax said nationally house prices continue to tread water and are at a similar level to three years’ ago at £160,256.

“Overall, there has been little change in house prices so far this year with the UK average price in August at a very similar level to the end of 2011. A gradual upward trend in spending power, aided by lower inflation, should help to support housing demand in the coming months, Nonetheless, house prices are likely to remain flat over the remainder of 2012 and into next year.”

Russell Quirk, director of estate agents, added that lower inflation is unlikely to help support housing demand. 

He said: “It’s clutching at straws to think that marginally lower inflation will suddenly inject confidence into the market. There are countless points of weakness.

“The rest of 2012 looks set to be a non-event. Prices will be up one month, down the next due to low transaction levels but overall the picture will be flat. Until lenders start to lend at higher LTVs, and consumers get more confident about the future, the property market will remain stuck in first gear.”

Halifax said the number of mortgages approved to finance house purchase picked up in July with a 7% increase following a 13% decline the month before.

The lender added that resilient employment has probably helped support housing demand. The number of people in employment increased by 210,000 in the second quarter of 2012, the largest quarterly increase since the three months to July 2012.

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