Halifax has today revealed that house prices in the last three months had fallen 1.2% compared with house prices between December and February.
The March to May results show an underlying trend that house prices are in modest decline, and have been for much of the last 12 months.
The average house price in the UK for May was £160,519 which is 1.4% lower than in December 2010, on a seasonally adjusted reading.
There was an increase in the ratio of house sales to the number of unsold properties on surveyors books for the third month in a row in April.
The RICS monthly survey is used to measure market conditions and has been a historically good indicator of short-term house price movements.
Through evidence of a slight tightening in market conditions, we can assume that house prices will increase slightly in the next few months.
The number of homes sold remained subdued again, with the number of house sold in the first four months of 2011 5% down on the same for months last year.
Just 279,000 homes were sold, compared with 293,000 in January to April last year.
Housing economist Martin Ellis explained, “House prices continue to drift modestly downwards as measured by the underlying trend. Prices in the three months to May were 1.2% lower than in the previous three months; unchanged from April. There was a 0.1% rise in prices in May following April’s 1.4% decline.”
“Low earnings growth, higher taxes and relatively high inflation are all putting pressure on household finances. Confidence is also weak as a result of uncertainty about the economic and employment outlook. These factors are probably constraining housing demand and applying some downward pressure on prices.”
“Overall, we expect a moderate improvement in the economy during the remainder of 2011, which combined with continuing low interest rates, is likely to support housing demand. This should prevent a further marked fall in prices and help to stabilise property values later in the year.”