Decline in UK house prices slows in June
The Halifax data showed UK house prices falling by 0.5 per cent in June, compared to a 2.6 rise during the previous month. The annual rate of change now stands at -15 per cent.
Halifax’s housing economist Martin Ellis said: “Improvements in affordability and low interest rates have stimulated housing demand.
“This, together with a low level of properties available for sale, has helped to stabilise activity and reduce the underlying rate of house price decline in recent months.”
The affordability of housing also increased in June. Monthly repayments accounted for an estimated 21.6 per cent of average gross household income in June 2009 for existing mortgage borrowers, compared with a peak of 26.9 per cent in October 2008.
The average price of a UK house is now 4.33 times average earnings, compared to more than five times in June last year.
But Ellis added: “Overall, we expect to see a continuing mixed pattern of monthly house price rises and falls over the remainder of 2009.”
The Halifax data is a sharp contrast to the Nationwide figures releases last week showing that house prices rose 0.9 per cent in June. But while the pace of decline is clearly slowing, analysts remain uncertain that the downward trend is over.
Howard Archer at IHS Global Insight said: “The Halifax data reinforce our doubts that house prices have bottomed out and we do not think that we are now at the start of a renewed sharp upward trend.”
US weekly mortgage data showed yesterday a rebound in demand for the week ending 3 July, up from the previous week’s seven-month lows.