House prices fall by 1.1% in two months - Mortgages - News |

News News brings you the latest financial & economic news & reviews of the best products in the UK by our team of money experts.

House prices fall by 1.1% in two months

House prices fall by 1.1% in two months

Category: Mortgages

Updated: 08/07/2010
First Published: 08/07/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
The gains seen in house prices over the last year appear to have come to a shuddering halt, as the strain on supply has eased.

House prices declined by 0.6% on average during June, following a 0.5% fall in May, figures from the Halifax House Price Index show.

Prices in the second quarter were 0.1% lower than they were in the first three months of the year, continuing the slowdown in pace of growth since the beginning of 2010.

Prices in the first quarter were up by 0.6% on the previous three month period.

Property values are still up on the same point a year ago, with an average price of £166,203, some 6.3% more than it was 12 months ago.

For all the recent talk of house prices creeping back towards the peak seen in August 2007, the cost of a home is currently 17% down on that time.

Housing economist Martin Ellis, said today's figures were in line with the view that house prices will be broadly unchanged over 2010 as a whole.

"A shortage of properties for sale in 2009 contributed to an imbalance between supply and demand and was a key factor driving up house prices last year," he added.

"An increase in the number of properties available for sale in recent months has helped to reduce the imbalance, relieving the upward pressure on prices. The low level of interest rates, however, continues to support housing demand."

The supply and demand ratio has eased somewhat since the abolition of HIPS, a scheme which added significant costs to putting a home on the market.

This indicates a moderate loosening in conditions, reducing the support for house prices.

With prices falling and recent research from showing mortgage rates to be at a seven year low, now may be the time to either get a foot on the ladder or trade up or down.

Amongst the best two mortgages currently available are a deal from The Co-operative Bank at a rate of 2.95% and a deal from HSBC at 2.99%.

Yorkshire BS also offers a two year fixed rate mortgage deal at 3.05%.

Amongst the best variable rate mortgages on the market is HSBC's 2.39% tracker, while ING Direct offers a rate of 2.84% for the term.

Find the best mortgage rate - Compare best selling mortgages

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.