July 2012
- Annual change -0.6%
- Quarterly change 0.0%
- Monthly change -0.6%
- Average Price £161,094
Commenting, Martin Ellis, housing economist, said:
"The underlying trend in house prices was flat in the three months to July compared with the previous three months. House prices fell by 0.6% in July following consecutive increases in May and June as prices continue to fluctuate on a monthly basis.
"At a national level, house prices have been very stable over the past year or so. This can largely be explained by the static nature of supply and demand conditions during this period. Looking forward, we expect little change in prices over the remainder of 2012 so long as the economic climate in the UK does not worsen substantially."
Key facts
- House prices in the three months to July were unchanged from the preceding three
months. This represented an improvement on the previous month when this measure of
the underlying trend reported a fall of -0.3%.
- House prices decreased by 0.6% in July. The decline in July followed two consecutive
rises as prices continue to fluctuate on a monthly basis. So far this year, there have been
four monthly rises and three falls.
- Marginal increase in prices so far this year. The average UK house price in July 2012
was 0.8% higher than in December 2011, at £161,094. Nationally, house prices are at a
very similar level to the summer of 2009.
- Prices in the three months to July were 0.6% lower than in the same period a year
earlier. This was very similar to the fall of 0.5% recorded in June as the annual rate has
remained within a narrow range of between -0.1% and -0.6% over the past five months. A
year ago, prices were falling at an annual rate of 2.6% (July 2011).
Peter Rollings, CEO of estate agent Marsh & Parsons, comments:
“A lethargic mortgage market and faltering economy have conspired to undermine house prices, and the performance of central London is masking even greater falls around the country. Securing an affordable mortgage without a colossal deposit is an Olympian task for the average buyer, and this is reining in competition for properties across the country – preventing sales prices from climbing back to anything like their pre-crunch heights.
“Recovery will be dependent on the ability of the Funding for Lending scheme to unlock the lower echelons of the housing market. At present, lenders are providing the low-risk equity-rich buyers with incredibly cheap rates. But if we are to see consistent price rises outside the boundary of the M25, cheaper finance must reach higher LTV borrowers, re-igniting buyer activity from the bottom-up. As things stand, it is only cash-rich areas like prime London that are able to defy the effects of historically weak mortgage lending.”
Russell Quirk, founder of low cost online estate agents, eMoov.co.uk, commented:
"The property market, like the economy, is in a perpetual limbo. It's being kept alive by low interest rates but held down by lack of confidence and lender caution. Four rises and three falls so far in 2012 says it all — the property market is devoid of direction, exaggerated by the lack of transactions.
"The hope is that the Funding for Lending scheme will ignite the market. The issue, though, is that the new scheme is all about cost when what's holding back the market is criteria. A major problem is that estate agents continue to overvalue properties to win instructions. But this desperation is only adding to the stasis in the market. When property does come on the market, it's often overvalued, which delays transactions.
"The months ahead will prove pivotal as we discover whether the Euro will survive or fail. This could have a massive impact on the UK's property market, just as it will have a massive effect on the UK's economy."
