The UK’s property market is continuing to “tread water”, after figures from Halifax revealed that house prices dipped by a marginal 0.4% in August.
The drop in the market meant that the average house price fell to £160,256 last month, negating the effects of two previous rises and bringing property values to the same level recorded at the end of 2011.
Halifax housing economist Martin Ellis said that an easing of inflation could boost consumers’ spending power and could prop up house prices in the ensuing months as a result.
However, he said that the outlook for the UK’s property market was still bleak, with house prices expected to remain flat into 2013.
Data from Nationwide painted a more positive picture for property prices in the UK, outlining that the value of homes inched up by 1.3% in August, representing a two-and-a-half year high for property price growth.
However, Robert Gardner, Nationwide’s chief economist, argued that while the upturn may support the idea that the average value of homes in the UK is on the increase, property values are likely to remain stable over the next few years.
“House prices are expected to remain fairly stable over the next two years, while incomes are likely to continue to rise gradually, which will also help to support affordability,” he said.
Barclays analyst Blerina Uruci supports the idea that the UK’s housing market will continue to stagnate for the remainder of the year.
“We expect house prices to be marginally lower in 2012 compared with last year as the weakness in demand is likely to be offset by tight housing supply and support coming from the Funding for Lending Scheme,” he said.
In contrast, Mark Harris, chief executive of mortgage broker SPF Private Clients, argues that the housing market is likely to pick up in the upcoming months:
“September heralds the start of a final push in property sales before the end of the year as many would-be buyers aim to get into their new homes before Christmas. As a result we expect to see a pickup in business in the next couple of months,” he said.