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House prices rise 3% in first half of 2010

House prices rise 3% in first half of 2010

30 June 2010 / by Rachael Stiles

The average house price in the UK rose three per cent during the first six months of the year, according to the latest figures from Nationwide.

The Nationwide House Price Index for June shows that house prices have crept up 0.1 per cent this month, a smaller rise that May's 0.5 per cent, bringing the average house price £170,111.

The Index recorded annual inflation of 8.7 per cent, compared to 9.8 per cent in May; meanwhile, the three month on three month rate of change rose marginally from 1.7 per cent to 1.8 per cent.

Nationwide also noticed an incline in the number of properties coming on the market – the building society suggests that this could be due to the scrapping on Home Information Packs (HIPs) by the new coalition Government last month.

Commenting on June's Index, Martin Gahbauer, chief economist at Nationwide, said: "The month of June presented a picture of broad stability for the housing market.

Barring a significant pick-up in house prices over the next few months, the annual rate of inflation should continue to drift lower, in light of the very strong price increases recorded during the summer of 2009."

Mr Gahbauer predicts that with the level of demand for properties remaining broadly stable, "this would in part help to explain the recent slowdown observed in the rate of house price inflation."

Commenting on the figures from Nationwide, Simon Rubinsohn, chief economist at RICS, said: "This the smallest monthly gain since February 2010, when prices on this series dropped by 0.9 per cent, and before that, from April last year. The flatter trend in prices which now appears to be emerging is consistent with evidence that fresh supply onto the market is beginning to outstrip new buyer enquiries.

"Indeed, the decision to abolish HIPs is likely to encourage an increase in new instructions to estate agents if the results of the latest RICS survey are anything to go by; according to this, the supply of property onto the market is expected to rise by around 15 per cent."

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