House Prices Drop By 0.5%

House prices have declined by 0.5% according to a survey by Halifax.

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.

Martin Ellis, Housing Economist, said: "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."

Between April 2008 and April 2009, the average annual cost of housing fell from £8,766 to £7,298, a decline of 17% (£1,468). The significant fall in housing expenses over the past year was driven by the decline in mortgage interest payments. Housing costs currently account for 23% of average UK full-time earnings, down from 28% in 2008. The overall expense of owning and running a home is at its lowest since 2006.

(CD/JM)