House prices up 0.9% in June

Good news on the UK property market, with Nationwide reporting a 0.9% rise in the average price of a home in June, to £156,442.

According to the building society, prices have increased during three of the past four months, easing the annual rate of decline to 9.3%, compared to 11.3% in May.

The lender’s chief economist, Martin Gahbauer, acknowledges that the improvement seen since March is more than just “statistical noise”, commenting that the change is unexpected, “given that transactions activity that is still very low by historical standards”.

On a three month measure, house prices are 0.9% higher in June, demonstrating the first quarterly rise since December 2007 and leading Nationwide to predict that prices could be showing only a “small single digit” fall by the end of 2009, if the trend continues.

However, a sustained recovery of the market could be some way off because transaction volumes remain at record lows and mortgage finance is still incredibly tight.

In addition, Mr Gahbauer points out: “Rising unemployment and associated job insecurity are also limiting the extent to which enquiries can translate into actual transactions.”

The news from Nationwide comes alongside latest figures from Hometrack showing that in England and Wales, prices remained stable in June, for the second consecutive month, putting the annual rate of decline back to 8.7%.

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