House prices growth slows

House prices rose just 0.1% in June, a much slower pace than previous months, figures from Nationwide show.

The Nationwide numbers echo other house price surveys, such as Halifax’s, which have shown the housing market recovery stalling.

The slowdown is in part due to the increasing amount of property coming to the market which is not being matched by demand.

The building society had reported growth of 0.5% the previous month and 1% before that. Halfway through the year, prices have grown a total of 3%.

Its latest figures show that the annual rate of house price inflation dropped for the second consecutive month from 9.8% to 8.7% as prices were increasing at a faster pace this time last year.

Martin Gahbauer, Nationwide's chief economist said: ‘Barring a significant pick-up in house prices over the next few months, the annual rate of inflation should continue to drift lower, in light of the very strong price increases recorded during the summer of 2009. 

Gahbauer said the increase in supply of properties on the market might be due to the coalition government’s abolition of Home Information Packs.

Halifax recently reported a second straight month of house price declines. The Land Registry, which lags other indices, reported this week that House prices had fallen by 0.2% in May, the first negative monthly movement it had recorded for over a year.