House prices resume fall

The average price of a house in the UK fell by 0.5 per cent in June, the Halifax has announced.

The decline brought the average house value to £157,713, bringing to an end the rise seen over the previous three months. Prices in May had risen 2.6 per cent, according to the UK's biggest lender. The renewed decline meant prices fell over the course of the second quarter by 1.9 per cent, still the smallest quarterly decline since the first quarter of 2008 and an annual drop of 15 per cent. The previous yearly drop was 16.3 per cent.

The Halifax’s housing economist, Martin Ellis, said of the figures "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."

Rival Nationwide said recently that prices had risen six per cent since February, a much steeper increase than the Halifax. In spite of the fall in June, the overall picture is at worst mixed, in contrast to last year’s chain of falls.

Later today the Bank of England is due to give its latest decision on interest rates, with most economists expecting them to be kept steady at the record low level of 0.5 per cent.

WHAT THEY ARE SAYING:David Smith, senior partner at property consultancy Carter Jonas, in the Guardian: "The problem is confidence. The moment we read reports that the worst of the recession is behind us, most recently by the British Chambers of Commerce, any sense of optimism is immediately negated by a piece of poor economic news. The housing market has started on the road to recovery, but it's going to be a long one. We are likely to bump around the bottom for some time yet."

Simon Rubinsohn, chief economist of the Royal Institution of Chartered Surveyors, on BBC.co.uk: "The [figure] provides a timely reminder that despite the better news flow emerging from the housing market it is far from clear that prices have bottomed. The combination of further job losses and a continuing lack of mortgage finance remain major headwinds for the market." ·