House prices recover in July, according to the Halifax

1 min Read Published: 04 Aug 2010

However, the mortgage lender said the mixed pattern of monthly rises and falls in the year to date was consistent with a slowing market.

It expects that house prices will be broadly unchanged across 2010 and said low interest rates and a recovering economy were helping to underpin demand.

The average house price is now £167,425, which is 16pc below the peak seen in August 2007 but 8.3pc above its trough in April 2009.

Halifax said the increase in the number of properties for sale over the past few months, boosted by the recent abolition of Home Information Packs (HIPs), has relieved much of the pressure which was driving up prices in 2009.

June's fall of 0.6pc, which followed price declines in April and May, came amid uncertainty over the impact of Chancellor George Osborne's emergency Budget. Analysts had forecast a monthly fall of 0.3pc.

(the above is in an extract from a report in today’s Daily Telegraph. The full article can be found here).

While monthly fluctuations in house prices are nothing unusual, and should not be over emphasised, this story does highlight the apparent slow down within the housing market. This shouldn't be a surprise due to the general tightening of credit availability coupled with an increase in the number of potential sellers, partly a result of the abolition of Home Information Packs. Demand is weak while supply is increasing, so hence prices will fall. A simple case of supply and demand.