House prices fall for the third month in a row during June as the housing market recovery showed further signs of faltering, according to the Halifax.
The average price of a home fell by 0.6% during the month to £166,203, following a 0.5% slide in May and a 0.1% decline in April, the lender said. However, prices in the second quarter were largely unchanged compared with the first three months of the year. They are also 6.3% higher than a year ago and 7.5% above their April 2009 trough.
Martin Ellis, housing economist at the Halifax, said the house price data was in line with his expectations. “This pattern is in line with our view that house prices will be broadly unchanged over 2010 as a whole,” he said.
“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.”
Last week, Nationwide said the price of a typical UK property increased by 0.1% in June compared to the previous month, but the rate of increase has slowed markedly from 0.5% in the previous month. It concluded that the annual rate of house price inflation dropped from 9.8% to 8.7% in June, making the typical house price £170,111.
Commenting on today’s figures Howard Archer, chief economist at IHS Global Insight, said: “The third successive drop in prices reported by the Halifax adds to a recent flurry of soft data on the housing market and stokes our relative pessimism over the housing market.
“Indeed, we increasingly suspect that house prices will be only flat over the rest of this year. We had previously thought a small rise was possible.”