House prices slide in June |
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Published
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Fri, 07 Jul 2006 10:45
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LONDON - House prices in the UK fell by 1.2 percent in June registering the biggest fall since October 2000, according to a new set of figures released by Halifax.
Britain's biggest mortgage lender also said that the north-south divide was more pronounced for the first time in nearly four years. Halifax added that the number of mortgage approvals was also down by 4 percent. The average house price has slipped to £176,509. However the annual rate of house price inflation increased to 9.4 percent last month from 9.1 percent in the previous month.
"This has been the sharpest fall in prices for almost six years. The last time we saw house prices falling by this amount was in October 2000, when they also fell by 1.2 percent," said Martin Ellis, chief economist at Halifax. "Combining this with the fact that we saw prices pretty flat in May, I would say that the housing market is coming off the boil." But although the property market appears to have slowed down, the fundamentals are still very strong, Ellis added. "This does not herald a period of sustained falls in prices. We are entering a period where we would expect prices to be pretty stable."
Halifax said the main reason for this stall in the market was that surging utility and council tax bills had begun to hurt the average householder. "Sound fundamentals, underpinned by a strengthening economy, high levels of employment and low interest rates, will continue to support housing demand over the second half of 2006," Ellis said. Another thing that is likely to work against the housing market is the Bank of England's interest rates, which are tipped to rise soon.
Reacting to this latest survey, Howard Archer, chief UK economist at Global Insight, said, "The surprisingly sharp 1.2 per cent fall in house prices in June reported by the Halifax, following an increase of just 0.1 per cent in May, adds to the mounting evidence that house prices have recently lost momentum."
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