House prices in the United Kingdom decreased in July, after recording growth in the previous two months and there is likely to be little change in prices during the rest of the year, a survey by Lloyds Banking Group's Halifax division showed Monday.
House prices dropped 0.6 percent from the previous month, reversing the 0.8 percent and 0.4 percent gains recorded in June and May respectively, data released by Lloyds Banking Group's Halifax division showed Monday.
Prices continue to fluctuate on a monthly basis, the lender said. Thus far, there have been four monthly rises and three falls this year.
"House prices have been very stable over the past year or so," Halifax Housing Economist Martin Ellis said. "This can largely be
explained by the static nature of supply and demand conditions during this period."
On an annual basis, the house price index recorded a 0.6 percent decrease in the three months to July, after falling 0.5 percent in the April-June period.
Sequentially, prices were flat during the July quarter, following the 0.3 percent fall seen in the three months to June.
"Looking forward, we expect little change in prices over the remainder of 2012 so long as the economic climate in the UK does not worsen substantially," Ellis said.
The average house price fell to GBP 161,094 from GBP 162,104 in June and GBP 163,200 in the same month last year. Nationally, house prices are at a very similar level to the summer of 2009, the survey said.
In the first half of 2012, house sales were higher by 10 percent from a year earlier, suggesting that there was a rush by first-time buyers to beat the end of the stamp duty holiday at the end of March. Sales dropped by 11 percent between the first quarter and the second quarter.
Other surveys have also revealed declines in house prices. A survey by the Nationwide Building Society last week showed that British house prices declined at the fastest pace since August 2009 in July.
Mortgage solutions provider Hometrack last month said home prices in the U.K. declined for the first time this year in July on lower demand for properties due to the deepening recession and debt worries.
The Bank of England at the latest meeting kept its policy rate unchanged at a record low 0.50 percent, reflecting a wait-and-watch approach till the recently initiated stimulus measures feed through and take effect. The central bank also maintained the asset purchase program at GBP375 billion.
The U.K. economy sunk deeper into recession in the second quarter. The economy shrank at the fastest pace since the beginning of 2009 and is currently reeling under a double-dip recession.
Inflation has continued to slow in the U.K. on easing fuel prices amid sluggish economic activity. The figure fell to 2.4 percent in June, the lowest since November 2009.
In the latest Inflation Report to be released on Wednesday, the central bank is widely expected to lower its macroeconomic projections.
by RTT Staff Writer
For comments and feedback: firstname.lastname@example.org