UK house prices down 0.5% year-on-year
UK house prices in the three months to June were 0.5% lower than in the same period a year earlier, taking the average price to £162,417, according to the Halifax House Price index.
While prices were 0.3% lower than they were in the previous quarter, in the month of June alone, prices increased by 1%.
Overall, however, the market has remained largely flat over the past year.
Halifax's housing economist Martin Ellis says: "There has been a marked improvement in the annual rate of change over the past 12 months. A year ago, in May 2011, house prices were falling at an annual rate of 4.2%. In contrast, there has been broad stability recently with the annual rate between 0% and - 0.5% in each of the past three months."
He also pointed out that the ending of the stamp duty holiday at the end of March "appears to have distorted house price movements and sales in recent months. Nonetheless, despite falling back in April and May, sales remain slightly higher than a year ago".
Lack of confidence
Halifax estimates the ratio of affordability to now be 4.36, based on the national average earnings for full-time male employees, compared to 5.86 back in the second quarter of 2007 when the Bank of England base rate was 5.25%.
Ellis adds: "Continuing low levels of mortgage payments relative to income and recent increases in employment may have helped support house prices so far this year. We expect little change in prices and sales over the remainder of the year provided that the UK's economic outlook does not deteriorate significantly."
Meanwhile, Mark Harris, chief executive of mortgage broker SPF Private Clients, says: "There is still a lack of confidence among buyers and sellers, and a lack of stock coming to market as a result.
But there are some great mortgage rates on offer, particularly from some of the smaller building societies, which is good news for those who are looking to buy or remortgage, and have the necessary deposit or equity."
A hugely unpopular tax paid on property and share purchases. Stamp duty on property is levied at 1% for purchases over £125,000 (£250,000 for first-time buyers) which then moves up at a tiered rate. For property between £125k and £250k you pay 1%, then 3% from £250k up to £500k and then 4% from £500k to £1m and then 5% for properties over £1m. But unlike income tax, which is “tiered” and different rates kick in at different levels, stamp duty is a “slab” tax where you pay the rate on the whole purchase price of the property. On shares, stamp duty is charged at a flat rate of 0.5% on all share purchases. Figures correct as of May 2011.
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.