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Housing market momentum slowing, says report

Housing market momentum slowing, says report

Category: Mortgages

Updated: 04/06/2010
First Published: 04/06/2010

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This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
House prices fell in May, the second successive month of falls, according to a new report that has been released today.

The Halifax House Price Index has reported that the average house price in the UK fell by 0.4% last month, following a 0.1% contraction in prices in April.

The average house price at the end of May was £167,570.

"The mixed pattern of monthly price rises and falls so far this year is consistent with a slowing market and is in line with our view that house prices will be flat during 2010 as a whole," said Martin Ellis, housing economist.

The rising number of properties being put up for sale is thought to have slowed the ascent of prices, as the demand is no longer outstripping supply by such a pronounced margin.

It is also thought that the coalition Government's decision to scrap Home Information Packs and changes to Capital Gains Tax could see more people put their homes on the market.

"The relative recovery in house prices in 2009 was driven by a boost to demand from reduced interest rates combined with a lack of properties for sale," said Mr. Ellis.

"These factors have lost some momentum in recent months. Further falls in the number of people in employment are curbing housing demand whilst the pickup in market conditions last year has encouraged more homeowners to attempt to sell their property."

Figures show that in the 12 months to May, average prices had increased by 6.9%, the largest annual increase recorded by the survey since October 2007 (8.9%).

This was achieved because price movements in March and April compared favourably with the significant declines recorded over the same period last year.

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