Home Information Packs (HIP’s) - News

House prices fall 1.7% in July

House prices fell 1.7% in July, decreasing at a lower rate than the falls of 1.9% in June and 2.5% in May, says the latest Halifax House Price Index.

The index says the average price of a house in the UK is more than 34% higher than five years ago.

The average price in July 2008, at £177,351, was £44,980 higher than in July 2003 when the average price was £132,371.

House prices in July were 8.8% lower on an annual basis. Halifax says average UK prices have returned to the level they were at in June 2006.

A solid employment market and low interest rates are now underpinning the housing market, the lender says.

Its research shows the number of employed people increased by 61,000 over the three months to May compared, with the previous quarter and by 413,000 over the past year to a record 29.59 million.

The average mortgage rate paid by all borrowers - the average rate on outstanding mortgage loans - fell by 0.21% during the first half of 2008, from 5.97% in December 2007 to 5.76% in June 2008.

This fall occurred despite Bank of England figures showing a rise in the average mortgage rate paid by new borrowers in recent months.

Suren Thiru, economist at Halifax, says: “Pressure on householders' income, together with a significant reduction in mortgage finance due to the global financial markets crisis, is constraining potential house buyers' ability to enter the market.

“This is resulting in both lower prices and activity levels.”

She adds: “A solid labour market, low interest rates and a shortage of new houses continue to support the market. The labour market is the key driver of the housing market and the number of people in employment is at a record high."



Posted on: 07-08-08