House prices continued to fall in June wiping out earlier gains made this year. The average house price in the UK is now £166,203, around £2,500 less than the figure at the start of 2010.
Prices fell 0.6% in June, following a 0.5% dip in May, according to Halifax.
Martin Ellis, Halifax’s housing economist, says the pattern is in line with his view that house prices will be broadly unchanged over 2010 as a whole.
He adds: "The increase in the number of properties for sale at the moment is curbing the upward pressure on house prices." Ellis says estate agents have reported a sharp increase in instructions from new vendors following the recent abolition of home information packs.
A separate report by LSL Property Services and Acadametrics, which just looks at house prices in England and Wales, also reveals a drop in prices in June, of 0.5%.
According to Dr Peter Williams, chairman of Acadametrics, the fall in house prices is due to "sellers finally coming to terms with buyer demand for greater price discounts". David Brown, commercial director of LSL Property Services, adds: "We can’t discount further house prices falls over the next few months as the market continues to stabilise and normalise."
Catherine Penman, head of research at property consultants Carter Jonas, says the figures show that the housing market recovery is not yet fully underway. "Any thoughts being entertained that the housing market was through the worst were a touch premature," she comments.
Penman argues that with a scarcity of houses on the market coupled with public sector cuts and higher taxes looming on the horizon, prices will likely stagnate for the remainder of the year.