Halifax reports June house price fall
House prices fell 0.5% in June, according to figures from the latest Halifax property survey.
June's fall follows a 2.6% rise in May, and brings the average property price to £157,715. But despite last month's 0.5% decline in values, the quarterly rate of house price falls is currently 1.9% - making falls in the second quarter the most modest since the first three months of 2008.
Martin Ellis, chief economist at Halifax, says the figures indicate "that the underlying pace of house price decline is easing".
There was also more promising news on an annual basis, with year-on-year fall of 16.3% in May easing to 15% last month.
Ellis adds: "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."
The second-quarter decline was also significantly lower than the 5% to 6% contraction seen in the last three quarters of 2008, providing evidence that improvements in affordability and the low base rate have "helped stabilise activity and reduce the underlying rate of house price decline in recent months".
Halifax's survey flies in the face of rival lender Nationwide's figures. Last week, the building society reported a second consecutive month of house price rises, and the first jump in quarterly figures since the end of 2007.
According to Nationwide, the average property price rose 0.9% in June to £156,442, following a 1.2% rise in May.
Martin Gahbauer, chief economist at Nationwide, said: "House prices have now risen in three of the last four months, suggesting that the improvement that began to show up in March represents more than just statistical noise."
He added: "What is unusual about the recent trend reversal, however, is that it has taken place against a background of transactions activity that is still very low by historical standard."
This is a mutual organisation owned by its members and not by shareholders. These societies offer a range of financial services but have historically concentrated on taking deposits from savers and lending the money to borrowers as mortgages, hence the name. In the mid-1990s many societies “demutualised” and became banks. One academic study (Heffernan, 2003) found demutualised societies’ pricing on deposits and mortgages was more favourable to shareholders than to customers, with the remaining mutual building societies offering consistently better rates. In 1900, there were 2,286 building societies in the UK; in 2011, there are just 51.
Also referred to as the bank rate or the minimum lending rate, the Bank of England base rate is the lowest rate the Bank uses to discount bills of exchange. This affects consumers as it is used by mainstream lenders and banks as the basis for calculating interest rates on mortgages, loans and savings.