House prices 'fell 0.5% in June'

The fall in prices is easing, the Halifax says

House prices fell back in June, according to the latest property survey from the Halifax.

It says property prices dropped by 0.5% last month, partly reversing a large 2.6% rise in May.

Despite June's decrease in house prices, the annual rate of decline eased from 16.3% to 15% last month.

The Halifax said there was evidence the property market was stabilising after the sharp slump in sales and prices seen since the middle of 2007.

There are further indications of a modest improvement in sales activity

Martin Ellis, Halifax

The average UK property now costs £157,715, according to the Halifax.

The lender's chief economist, Martin Ellis, said prices had fallen by only 1.9% in the past three months - the lowest quarterly rate of decline since early last year.

"These figures provide evidence that the underlying pace of house price decline is easing," Mr Ellis said.

"There are further indications of a modest improvement in sales activity, albeit at a very low level," he added.

Different picture

The figures from the Halifax tell a different story from those recently published by rival lender Nationwide.

Last week it said prices had risen in three of the past four months, leaving them nearly 6% higher than they were in February.

By contrast, the Halifax, whose figures are based on a sample of its own lending, said prices had risen only once in the past four months, and were still 2% lower than they were in February.

"The [Halifax] provides a timely reminder that despite the better news flow emerging from the housing market it is far from clear that prices have bottomed," said Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors.

"The combination of further job losses and a continuing lack of mortgage finance remain major headwinds for the market," he added.

However, there seems little doubt that housing sales are picking up, stimulated by the very low level of interest rates.

Completed sales in May were at their highest since October 2008, according to recent figures from HM Revenue & Customs.

And mortgages approved for house purchase but not yet lent - traditionally a good indicator of near term trends in sales - are also rising and are currently 10% higher than a year ago, the Bank of England has said.

"Supply, or rather the lack of it, is the major driver of the current stabilisation in house prices, although there is also a discernible rise in demand," said David Smith, of property consultancy Carter Jonas.

"The housing market has started on the road to recovery, but it's going to be a long one," he added.