UK house prices rise, but market remains on a 'knife edge'

UK house prices rose 1% in June, according to Halifax.

In the three months to June, however, prices fell 0.3% compared with the previous quarter, and they are down 0.5% over the year.

House prices have continued to fluctuate on a monthly basis, with an even number of falls and rises over the past year, but there has been a marked improvement in the annual rate of change, explained Halifax’s housing economist Martin Ellis.

‘A year ago, in May 2011, house prices were falling at an annual rate of 4.2%,’ Ellis said. ‘In contrast, there has been broad stability recently with the annual rate between 0% and - 0.5% in each of the past three months.’

And although the end of the stamp-duty holiday for first-time buyers at the end of March appears to have distorted house price movements and sales in recent months, sales nonetheless remain slightly higher than a year ago, he added.  

Looking forward, Ellis said Halifax expects little change in prices and sales over the remainder of the year – provided the UK’s economic outlook does not deteriorate significantly.

Russell Quirk, director of estate agent website eMoov.co.uk, warned that the housing market is still on a knife edge.

‘The improvement in the annual rate of change suggests that prices have bottomed out, but a "black swan" event coming in from Europe could add further downward pressure,’ he said.

The average house price is now £162,417, said Halifax.

Property website Rightmove also recorded a 1% increase in June prices earlier this month. Nationwide, on the other hand, reported a 0.6% fall, while according to Hometrack prices stayed flat.