House prices rose 0.6% in July, Halifax reports

House prices have risen for the first time in three months, Halifax has reported.

The mortgage lender has reported house prices in July were up by 0.6% month on month, a modest rise following a fall of 0.6% in June.

This means house prices in the three months to July were 4.9% higher on an annual basis, down from 6.3% in the three months to May and from a high of 6.9% in the three months to April.

Martin Ellis, housing economist for Halifax, said: ‘Overall, there has been little change in prices during 2010 so far. The mixed pattern of monthly rises and falls over the first seven months of the year is consistent with a slowing market. It is also in line with our view that house prices will be broadly unchanged over 2010 as a whole’.

‘The increase in the number of properties for sale over the past few months, boosted by the recent abolition of HIPs [home income plans], has relieved much of the pressure that was driving up prices in 2009. Low interest rates and a recovering economy, however, are underpinning demand and continue to support the market,’ he added.

What the others say

The Halifax figures follow Nationwide’s report at the end of last month that house prices fell 0.5%, the first drop since February.

Land Registry, which lags the other indices, has not yet reported its July numbers but had shown a very slight increase in June, following a fall in May.

Russell Quirk, founder of online estate agency, emoov.co.uk, said: ‘With house prices, it’s a case of the blind leading the blind. The indices are divided, as are the experts’.

‘The Centre of Economics and Business Research said this week that prices will remain firm and end up slightly at the end of 2010, while the Royal Institute of Chartered Surveyors said they will be down come the end of the year,’ he said.

‘It’s tough to call the future direction of home values but there is a greater supply of stock and mortgages are still proving difficult to arrange for many so the trend is probably set to be a downward slope rather than an upward one,’ Quirk added.

David Smith, senior partner at property consultancy, Carter Jonas, said: ‘The Halifax figures confirm that what we are seeing is a stabilisation in the property market rather than, as some have suggested, the beginnings of a sharp correction’.

‘Increased supply is certainly placing downward pressure on prices at the lower end of the market but at the mid to high end prices remain buoyant. We are seeing the formation of a two-tier market,’ he added.