Halifax: House prices stabilise

The bank adds that prices were up on a quarter-to-quarter basis for the first time in 14 months, following a 0.5% rise in the three months to July.

Key Points

• House prices rose 0.3% in July

• Prices 2.6% lower over the year

• Average house price now £163,981

With little change in either the level of house sales or the number of properties on the market since late 2010, Halifax says the steady market conditions have helped to stabilise house prices.

Halifax housing economist Martin Ellis says: "This pattern is expected to continue over the rest of the year with little genuine direction in either house prices or sales."

The average UK house price in July was marginally higher than in December on a seasonally adjusted basis at £163,981. However the figure is still 2.6% lower than a year earlier, based on the average for the three months to July.

Despite today's figures, IHS Global Insight chief economist Howard Archer says he continues to believe that house prices will fall by around 5% from current levels by mid-2012.

He says he fears squeezed purchasing power, spending cuts, a softening labour market and concerns over the economic outlook will weigh down on potential buyers and dampen house prices.

"These factors are seen outweighing the support to house prices coming from extended very low interest rates," he adds.

Nationwide reported last week that house prices inched higher in July, climbing 0.2% from the previous month.