According to mortgage lender, the Halifax, house prices fell for the third month in a row in June as the economic recovery showed further signs of faltering.

Average house prices fell to £166,203 in June which after a 0.5% drop in May and a 0.1% drop in April. However in the second quarter of the year, despite the slides, prices remained largely unchanged in comparison to the first 3 months of 2010. House prices are 6.3% higher than the same time last year and 7.5% higher the lowest point in April 2009.

According to the Halifax’s housing economist, the pricing movements were as expected:

"This pattern is in line with our view that house prices will be broadly unchanged over 2010 as a whole.

"A shortage of properties for sale in 2009 contributed to an imbalance between supply and demand and was a key factor driving up house prices last year. An increase in the number of properties available for sale in recent months has helped to reduce the imbalance, relieving the upward pressure on prices. The low level of interest rates, however, continues to support housing demand."

A number of analysts and experts have attributed the further falls to an increase in the number of houses going onto the market. Nigel Lewis who is a property analyst for findaproperty.com stated:

"There are currently 23% more properties for sale on our site than there were a year ago, and this imbalance between supply and demand is now affecting pricing. We are reverting back to a buyer's market and therefore sellers must vie for their attention with more competitive prices."

It is expected that housing prices will remain largely flat throughout the rest of the year with a few fluctuations possible. Compared to last year this is relatively positive news.

Author:  Thomas Davies

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