House prices fell by 0.2 per cent in the last three months, the fourth quarterly fall in a row.
Prices rose 0.4 per cent between June and July, according to Halifax’s house price index, a partial turnaround from the 0.9 per cent fall in house prices recorded between May and June.
The last time house prices dropped for four consecutive quarters was November 2012, Halifax said.
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The average house price in July was £219,266, which was 42 per cent (or £64,603) more expensive than the national average when prices bottomed out in April 2009.
However, Halifax said house prices would be propped up in the long term by low levels of supply. In June, new instructions for home sales fell for the 16th month in a row, and estate agents’ stock levels are at an all-time low.
Russell Galley, managing director at Halifax Community Bank, said: “The rise in the employment level by 175,000 in the three months to May helped push the unemployment rate down to 4.5 per cent, the lowest since June 1975.
“However, this improvement in the jobs market has not, as yet, boosted wage growth, resulting in earnings rising at a slower rate than consumer prices. This squeeze on spending power, together with the impact on property transactions of the stamp duty changes in 2016 now being realised, along with affordability concerns, appear to have contributed to weaker housing demand.”