UK house prices rise in July

British house prices rose 0

British house prices rose 0.6 per cent in July, reversing the previous month's fall, mortgage lender Halifax said today as it maintained its view that house prices would flatten off this year.

The mortgage lender said prices rose 4.9 per cent in the three months to July compared with a year ago, down from 6.3 per cent in June and the slowest three-monthly rate since February.

Analysts had forecast a monthly fall of 0.3 per cent, for an annual rate of 4.6 per cent.

July's unexpected rise followed three months of falls and contrasted with a survey by rival mortgage lender Nationwide last week that showed prices fell 0.5 per cent last month.

Many economists believe the housing market will cool this year as Britain's economy struggles to pull clear of recession as deep government spending cuts and massive job losses in the public sector dent demand.

"We still think the overall evidence does point to pretty soft activity - more houses coming on to the market and a softening of prices," said Howard Archer, economist at IHS Global Insight.

Recent official data have shown mortgage lending remains weak and approvals for home purchase loans - a lead indicator of house prices - have held at low levels.

"Overall, there has been little change in prices during 2010 so far," said Halifax housing economist Martin Ellis.

"The mixed pattern of monthly rises and falls over the first seven months of the year is consistent with a slowing market. It is also in line with our view that house prices will be broadly unchanged over 2010 as a whole."

Halifax said the average price of a home now stands at £167,425, 16 per cent below its August 2007 peak but 8.3 per cent above its trough in April 2009.

Reuters