House Prices May Struggle Through Rest of Year
According to a Nationwide report June showed a very slight increase in house prices, and that the pace of the increase had slowed. In April the price rise was 1.1 per cent, in May 0.5 per cent, and in June 0.1 per cent. The annual comparison rate of house price inflation fell from 9.8 per cent in May to 8.7 per cent in June.
The Land Registry House Price Index showed a drop in May as well. Martin Gahbauer, Nationwide chief economist, said: "Barring a significant pick-up in house prices over the next few months, the annual rate of inflation could continue to drift lower in light of the very strong price increases recorded during the summer of 2009." He also noted there was an increase in the number of properties available for sale. This signals that the housing market recovery has lost strength and is coming to a stall. With an increase in homes being put up for sale but fewer buyers the supply and demand will change and the prices will decline. Howard Archer, chief UK and European economist at HIS Global insight, said: "The marginal house price rise in June reported by nationwide adds to a recent flurry of soft data on the housing market and further fuels our belief that house prices will struggle to make significant gains over the coming month and may very well be only flat overall through the rest of the year."