House prices have risen for the second time in three months in July, with the annual rate of decline continuing to ease, according to the latest Halifax House Price Index.
The index in July rose 1.1% from June and was 12.1% lower than the previous year. The annual fall was last smaller in August 2008, when prices fell 10.9%.
The July results compare with a 0.5% month-on-month fall and a drop of 15.0% on the year in June. Martin Ellis, housing economist at Halifax, said: “Demand for homes has risen, albeit from a very low base, since the start of the year, driven by improvements in affordability and low interest rates. Higher demand has combined with the low levels of property available for sale to boost sales activity from exceptionally low levels and support prices over the past few months.”
Brian Murphy, head of lending at Mortgage Advice Bureau, said: “Any sustained recovery will be out of the question until lenders start offering a wider range of products, at more competitive prices, to quality borrowers at higher LTVs. Unless people with smaller deposits, specifically first time buyers, can secure competitive mortgage finance, the mini-recovery we are seeing will be constrained. “
Of course, any recovery is not just about the availability of mortgages. It is also dependent upon confidence, and with ongoing job uncertainty, this remains in the balance.”