UK housing market shows more signs of stabilisation as prices surge in July

HOUSE prices in Britain rose 1.1 per cent in July in the latest sign of growing stability in the property market, data from Halifax showed yesterday.<br /><br />The mortgage lender reported that in the three months to July, house prices jumped 0.8 per cent, the first rise on a quarterly basis since October 2007. The rise meant the annual decline eased to 12.1 per cent, putting the average price of a UK house at &pound;159,623.<br /><br />Martin Ellis, housing economist at Halifax, said: &ldquo;Demand for homes has risen, albeit from a very low base, since the start of the year, driven by improvements in affordability and low interest rates.&rdquo;<br /><br />The house price-to-earnings ratio &ndash; a key affordability measure &ndash; has declined to an estimated 4.36 in July compared to a peak of 5.84 in July 2007, suggesting that houses are now becoming more affordable.<br /><br />But, Howard Archer at IHS Global Insight said: &ldquo;It continues to be very difficult for many people to get mortgages &ndash; particularly first time buyers &ndash; and this situation seems likely to improve only gradually.&rdquo;<br /><br />Echoing this, the Royal Institute of Chartered Surveyors (RICS) will say today that, although house prices look set to end the year higher than they started it, affordability is still stretched.<br /><br />RICS senior economist Brigid O&rsquo;Leary said: &ldquo;the outlook for 2010 is fairly uncertain and there is a real risk that prices may slip back again.&rdquo;