Our Halifax index showed that house prices across the UK increased by 0.5% in the three months to July.
There was also a positive monthly change compared with June’s figures, with house prices increasing by 0.3% in July – a steady improvement that provides a small degree of confidence for homeowners.
The good news is this the third consecutive month we have seen an increase, albeit a small one.
As a result, UK house prices are now 0.7% higher than at the end of 2010, with an average price of £163,981.
Despite this rise, prices in July were 2.6% lower than July 2010 when measured over the same three month period, equating to an average £3,516 decrease.
On a more encouraging note, the number of mortgages approved increased by 4% between May and June to 48,421, the highest monthly total since May 2010.
Over the last 12 months, however, this figure has stayed within 45,000-50,000 a month.
The number of house sales has also remained relatively constant since late 2010, which has helped stabilise house prices following last year’s decline.
This stability is expected to continue and no major increase or decrease in house price is expected in the near future. This will help support demand for property amidst a time of weaker earnings growth, higher than average inflation and higher taxes.
Due to evidence of continuing economic fragility, the likelihood of interest rate rises in the near future has greatly reduced and, as a result, fixed term rates have now been reduced to record low levels.
Halifax Intermediaries has reduced fixed rates a number of times over the last few months, which we expect to stimulate more remortgage activity as people start to weigh up their options.
It will be interesting to see how, over the coming months, the housing market reacts to the recent economic downturn.
However, should the number of sales remain consistent, coupled with the recent decrease in product rates, then the welcomed stability we have seen over the past few months is set to continue.
