U.K. house prices declined for the second straight month in August and continue to tread water, Lloyds Banking Group's Halifax division said Thursday.
House prices were down 0.4 percent from a month ago, when it fell 0.7 percent. The two successive decreases largely canceled out the increases recorded in May and June. Economists had forecast a 0.2 percent rise for August.
Prices in the three months to August were 0.9 percent lower than in the same period a year earlier. This measure of the annual rate has been between 0 percent and -1 percent throughout the last six months, it said.
At GBP 160,256, house prices nationally were at a very similar level to three years' ago.
According to the assessment of Halifax, a gradual upward trend in spending power, supported by lower inflation, will possibly support housing demand in the coming months.
However, house prices are likely to remain flat over the remainder of 2012 and into next year, said Martin Ellis, housing economist.
In an attempt to rebuild the economy, the U.K. government is set to relax the planning rules for building extensions on houses and business premises as part of a new package to be unveiled today.
The government is likely to announce support to 16,500 first-time buyers by expanding the FirstBuy scheme.
Meanwhile, the Bank of England is widely expected to maintain its quantitative easing programme at the current GBP 375 billion and the Bank Rate unchanged at 0.50 percent. The announcement is due today at 7.00 am ET.
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