Home prices in the UK dropped 1.2 percent in August 2011, one percent higher than in the preceding three months, according to the latest Halifax House Price Index.
“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 percent fall in August follows three months when prices have risen,” said Martin Ellis, Housing Economist at Halifax.
“As a result, the more reliable quarterly change, which smoothes out some of the monthly volatility, shows a rise in prices of one percent.”
It added that the average UK house price in August was marginally lower (-0.6 percent) at £161,743, compared to December 2010 on a seasonally adjusted basis.
On a yearly basis, prices in August were 2.6 percent lower, as determined by the average for the three months to August, compared to the same period in 2010.
Meanwhile, the number of UK mortgage approvals grew for the third consecutive month in July to 49,200 on a seasonally adjusted basis, revealed data from Bank of England.
Additionally, mortgage approvals rose 2.5 percent from last year.
The average mortgage rate for a new borrower dropped from 3.84 percent in June to 3.68 percent in July, which further improved affordability for those able to raise a sufficient deposit to buy a home.
“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,” Ellis noted.
For more information about the Halifax House Price Index, please click here.
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