House prices declined by 0.5% in June, according to the Halifax House Price Index.
Britain’s largest mortgage lender says the underlying rate of decline in house prices has eased, arguing the mixed picture of monthly rises and falls so far this year contrasts sharply with the consistent succession of significant monthly declines recorded in 2008.
House prices declined by 1.9% in Quarter 2. This was the smallest quarterly fall since 2008 Quarter 1 and was significantly less than the 5-6% declines in the last three quarters of 2008. The UK average price has returned to where it was five years ago in 2004 Quarter 2 (£157,091).
Martin Ellis, Halifax’s housing economist, said: "There was a 0.5% decline in average UK house prices in June. On a quarterly basis, the 1.9% fall in house prices in the second quarter was the smallest since 2008 quarter one. These figures provide evidence that the underlying pace of house price decline is easing.
There are further indications of a modest improvement in sales activity, albeit at a very low level. Industry-wide figures show that the number of mortgages approved to finance house purchase increased for the fourth successive month in May. Approvals were at their highest level since April 2008 and 10% higher than a year earlier.
"Improvements in affordability and low interest rates have stimulated housing demand. This, together with a low level of properties available for sale, has helped to stabilise activity and reduce the underlying rate of house price decline in recent months.
"Whilst there have been encouraging recent signs of improvement, the outlook for the UK economy remains uncertain with unemployment set to continue rising for sometime. Overall, we expect to see a continuing mixed pattern of monthly house price rises and falls over the remainder of 2009."