House prices fell by 1.2% in August to an average of £161,743, according to the latest Halifax house price index.
The average house price in August was 2.6% lower than in August 2010, but prices increased by 1.0% in the three months to August compared to the previous three months.
Martin Ellis, housing economist at Halifax, says: “The underlying trend, as measured by the latest three months compared with the preceding three months, showed a modest improvement in house prices for the second consecutive month in August.”
He says that current low sales volumes make house prices volatile from month to month, meaning that the quarterly change gives a more reliable indication of the market than the figure for August alone.
He adds: “A recent decline in average mortgage rates has further boosted home affordability for those able to raise a deposit to make a new purchase.
“Low interest rates are likely to continue to support the market whilst increased uncertainty about the economic outlook and pressures on householders’ finances constrain demand. Overall, we expect broad stability in both prices and activity over the coming months.”