Slump expected as house prices tumble in July

Julian Harris
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HOUSE prices across the UK dived by 0.6 per cent last month, according to a widely-regarded survey released yesterday, with analysts warning that the rest of 2012 will remain gloomy for the sector.

Prices in three months to July were flat compared to the previous three months. Halifax, which compiles the data, said that prices remain “at a very similar level to the summer of 2009”.

With inflation sticking above the Bank of England two per cent target for much of the last few years, house prices have dipped in real terms – although in some regions, such as London, prices have held.

The Halifax survey shows house prices in the three months to July are 0.6 per cent lower than at the same time last year. “A year ago, prices were falling at an annual rate of 2.6 per cent,” the report added.

Matthew Pointon, property analyst at Capital Economics, said: “With forward-looking indicators also weak and if anything softening, house prices are likely to show further modest falls over the rest of the year.”

The top line figure from the Halifax echoes data released last week by Nationwide, which showed a 0.7 per cent drop in July. “We expect house prices to end up losing at least thee per cent from current levels,” added Howard Archer of IHS Global Insight yesterday.

Yet Duncan Stott from the Priced Out campaign group said that costs need to fall further to help prospective buyers: “House prices may be falling ever so modestly, but [real] wages are also dropping. This means first time buyers are no better off and will be stuck renting until house prices become substantially more affordable.”