House prices down 6.1% from last year

The latest house price index from Halifax reveals that house prices in June were 6.1% lower than in June 2007.

The rate of decline in prices is levelling out however, as prices fell by 2% in June compared to 2.5% in May.

The average UK house price now stands at £180,344. UK house prices have risen by 196% since the trough of the housing market downturn in July 1995.

Prices increased for 48 consecutive quarters between 1995 Q4 and 2007 Q3 with the exceptions of 2000 Q2 when prices fell slightly (-0.1%) and 2005 Q2 (0.0%).

The housing market continues to be underpinned by sound fundamentals. Halifax’s research indicates that the labour market is the key driver of the housing market with employment at a record high of 29.5 million. Total employment increased by 76,000 over the three months to April compared with the previous quarter and by 446,000 over the past year.

Martin Ellis, chief economist, said: “House prices have declined by 6.1% over the past year. Nonetheless, the average UK price remains slightly higher than two years ago and is appreciably stronger than three or four years ago.

“A strong labour market, low interest rates and a shortage of new houses underpin housing valuations. Our research shows that the labour market is the key driver of the housing market. Employment is at a record high.”