House prices in slim rise in August

House prices rose 0.2 per cent in August mortgage lender Halifax has said.

Prices rose 4.6 per cent up in the three months to August compared with a year ago and took the average price of a home to £167,953 – nine per cent above its low in April 2009 but still 16 per cent down from a peak in August 2007.

Analysts had forecast a decline of 0.5 percent on the month, for a three-month annual rate of 4.4 per cent.

Halifax economist Martin Ellis said gains in the last two months had reversed the price falls reported between April and June, leaving prices at a similar level to where they were at the end of 2009 and that activity has also been static so far this year.

"These developments suggest that the market is broadly stable with house price inflation having cooled since last year when supply shortages helped to push up prices," Ellis said.

"We expect that UK house prices will remain static overall in 2010."

Rival mortgage lender Nationwide reported last week that house prices fell 0.9 per cent last month – the sharpest fall since February due to a rise in the number of properties available.

Howard Archer of Global Insight said: "The very modest 0.2 per cent rise reported by the Halifax in August does not fundamentally alter our view that house prices will ease back over the final months of 2010 and very likely soften modestly further in 2011.

"Specifically, we suspect house prices will fall back by some ten per cent in total."