UK House prices August 2011 (seasonally adjusted):
- Annual change -2.6%
- Quarterly change 1.0%
- Monthly change -1.2%
- Average Price £161,743
Commenting, Martin Ellis, housing economist, said:
"The underlying trend, as measured by the latest three months compared with the preceding three months, showed a modest improvement in house prices for the second consecutive month in August. Prices in the three months to August were 1.0% higher than in the previous three months.
"As we have pointed out before, the current low volume of sales tends to make house prices volatile from month to month. The 1.2% fall in August follows three months when prices have risen.
"As a result, the more reliable quarterly change, which smoothes out some of the monthly volatility, shows a rise in prices of 1.0%.
"A recent decline in average mortgage rates has further boosted home affordability for those able to raise a deposit to make a new purchase.
"Low interest rates are likely to continue to support the market whilst increased uncertainty about the economic outlook and pressures on householders' finances constrain demand. Overall, we expect broad stability in both prices and activity over the coming months."
Nicholas Ayre, a director of UK buying agents Home Fusion, said:
"Prices may well have risen 1% over the past three months but the 1.2% decline in August, double that observed by the Nationwide, carries more symbolic weight.
"August was a catastrophic month for the global and UK economy and it may well have turned a flat UK property market into one that is falling.
"Although the Halifax rightly points to low sales volumes skewing the data, the relentless flow of grim economic news is taking its toll on prospective buyers. A double dip in the economy is becoming more and more realistic, and if the economy goes down, the property market will go down with it.
"The low interest rate environment, competitive mortgage finance at higher LTVs and the low supply of housing are providing a degree of support to prices, but there is no guarantee they will withstand the weight of economic collapse.
"As ever, certain areas of the UK, specifically London, are proving more resilient to house price falls."
