House prices up 0.2% in August
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House prices increased by 0.2% in August, the latest Halifax House Price Index shows.
This was the second successive monthly increase following a 0.7% rise in July.
House prices in August were 4.6% higher on an annual basis as measured by the average for the latest three months against the same period a year earlier.
This was slightly below the 4.9% increase in July, continuing the recent downward trend and compares with a high of 6.9% in May.
Prices in July were marginally lower, -0.5% than at the end of 2009.
The current average house price of £167,953 is 9% above its April 2009 low, but remains 16% below its August 2007 peak.
Martin Ellis, housing economist at Halifax, says: “House prices increased by 0.2% in August. This, together with July’s rise, has reversed much of the modest decline in the three preceding months. Prices are now at a very similar level to that at the end of last year. Activity has also been largely static since the start of the year.
“These developments suggest that the market is broadly stable with house price inflation having cooled since last year when supply shortages helped to push up prices.
“The improved economy, strengthening labour market and low interest rates are all supporting housing demand. We expect that UK house prices will remain static overall in 2010.”
Catherine Penman, head of research at property consultancy, Carter Jonas, says: “The latest data from the Halifax, showing marginal positive growth in August, contrasts sharply with last week’s Nationwide data and offers further proof that what we are seeing is stabilisation, not collapse.
“The market is auto-correcting after the mini bull-run of 2009 when prices got ahead of the broader economy.
“There is a lot of hyperbole and scaremongering around house prices at present, specifically about the possibility of a double dip, but the reality is far more mundane. Month-on-month volatility will remain but we are likely to see a sideways-moving market over the course of the next six months.
“There are potential headwinds, not least anticipated rising unemployment in the wake of the Spending Review, but there are supports, too, in particular Bank Rate, which is likely to remain low for some time yet.”
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