Business

UK house prices treading water, says the Halifax

Monopoly piece on coins
Image caption The housing market has been stagnant as potential buyers and sellers play safe

House prices continue to "tread water" with values having dropped by 0.4% in August compared with July, the Halifax has said.

Prices have dipped by 0.3% in the less volatile three-month on three-month measure of house prices, the lender said.

The 0.9% drop in prices annually meant the average UK home was valued at £160,256, it added.

The Halifax said it expected little change in prices into 2013.

"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," said Martin Ellis, Halifax housing economist.

"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."

Predictions

The monthly figure from the Halifax contrasts with an earlier survey by the Nationwide, which said that prices jumped by 1.3% in August.

However, a number of commentators said that the monthly figures were volatile owing to the low number of sales.

Both surveys, which are based on data from their own mortgage lending, suggested that prices were stagnant over the longer term.

Housing market experts said that, although the market was broadly flat, there were a number of geographical exceptions, with some neighbourhoods recording large house price rises or falls.

September and October tend to see a pick-up in activity from buyers and sellers following the summer lull.

However, Howard Archer, UK and European economist at IHS Global Insight, said he still expected to see prices drop on average by at least another 3% from current levels.

Russell Quirk, director of estate agents eMoov.co.uk, said: "Until lenders start to lend at higher loan-to-values, and consumers get more confident about the future, the property market will remain stuck in first gear."

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