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House prices inch up again

House prices inch up again

Category: Mortgages

Updated: 05/08/2011
First Published: 05/08/2011

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House prices inched up again in July, the third month in succession that they have increased.

Prices rose by 0.3% in the month, figures from Halifax show, taking the average value of a home in the UK to £163,981.

Prices were also 0.5% higher over the last three months than the previous quarter – the first increase in what is considered to be a key measure of underlying price trends for 14 months.

Prices remain down year-on-year, however, with the average cost of a property in the UK 2.6% lower than at the same point in 2010.

The rate of decline is slowing though; in May, prices had fallen by 4.2% compared with the same month in 2010.

Despite the movement, figures show that there has been little change in housing activity since last year, both in terms of sales and properties on the market.

The number of mortgages approved to finance house purchase - a leading indicator of completed house sales - increased by 4% between May and June to 48,421; the highest monthly total since May 2010.

Despite this encouraging rise, the industry-wide number of approvals remains within the range of 45,000-50,000 per month where it has been since the beginning of 2010.

Approvals in the second quarter were unchanged from the previous quarter on a seasonally adjusted basis.

Martin Ellis, housing economist, said that the steady market conditions have helped the housing market get on an even keel.

"These steady market conditions have helped to stabilise house prices in 2011 following last year's modest decline.

"This pattern is expected to continue over the rest of the year with little genuine direction in either house prices or sales.

"Sustained low interest rates and a slowly improving economy should help to support demand in the face of pressures with weak earnings growth, relatively high inflation and higher taxes."

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