House prices unlikely to rise says Halifax
The Halifax expects house prices to be the same at the end of the year as they were at the beginning, with uncertain economic conditions stifling demand.
The bank, which is part of the Lloyds Banking Group, reported a 0.1 per cent fall in house prices in May 2012, compared with May 2011.
However, compared with the previous month, house prices increased by 0.5% in May 2012.
The average house price is now £160,941, 0.7 per cent higher than in December 2011.
The property market in 2012 has been volatile, with house prices falling by 2.3 per cent between March and April 2012.
Over the three months to May they increased by 0.8 per cent compared with the previous quarter.
Martin Ellis, housing economist for the Halifax, said: “While there has been a modest improvement in the trend for house prices recently, the current average UK price is very similar to the levels both a year ago and at the beginning of this year.
“We expect this situation to continue with prices likely to still be around today’s levels at the end of 2012 as the ongoing tough economic environment constrains housing demand.”
With the crisis in the eurozone continuing, lenders are expected to remain cautious in offering mortgages, hampering housing market activity and keeping prices down.
Although house sales increased at the beginning of the year, with buyers rushing to beat the end of the stamp duty holiday on first-time buyer homes, sales fell by 18 per cent in March and April.
A recent study by the Centre for Economics and Business Research (CEBR) suggests that the gap between house prices in the north and south of the UK will continue to grow until 2014.
The CEBR expects house prices in London and the South East to continue to increase while prices in northern England and Scotland are expected to fall.