House prices bounced back in June

 
Helen Cahill
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Housing Market Shows Tentative Signs Of Recovery
House prices have been in decline for three months (Source: Getty)

House prices rose in June, beating analyst expectations, but experts have warned that the market will remain soft this year.

According to Nationwide's house price index, house prices rose 1.1 per cent month-on-month in June, reversing the declines recorded over the past three months.

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Annual house price growth came to 3.1 per cent, up from the 2.1 per cent recorded in May.

Robert Gardner, Nationwide's chief economist, warned that "monthly growth rates can be volatile", but noted that annual growth had returned to a more healthy level.

"There has been a shift in regional house price trends," Gardner said. "Price growth in the South of England has moderated, converging with the rates prevailing in the rest of the country."

June 2017 May 2017
Monthly change 1.1 per cent -0.2 per cent
Annual change 3.1 per cent 2.1 per cent
Average house price £211,301 £208,711

House prices in London have undergone a "particularly marked slowdown", he added.

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In the capital, annual growth has fallen to just 1.2 per cent, the second slowest growth of any of the UK regions.

Howard Archer, chief economic adviser, EY ITEM Club, said: "House prices can be volatile from month to month, and June's rise needs to be seen in the context that house prices had previously fallen in each of the previous three months, which was the first time this had happened since 2009."

Pantheon Macroeconomics' Samuel Tombs said the decline in mortgage rates, and the drop in the number of houses on the market, was holding up prices.

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