UK house prices continue to show a slow recovery, lifting by 0.2% in July on the back of a similar rise the previous month, according to Halifax.
The July House Price Index from the lender finds the annual rate of house price inflation continues to slow, dropping to 2.3% during July, its smallest rate of growth since April 1996.
Halifax says the standardised average house price in the UK is at £162,994, with affordability in line with the long-run historical average.
It predicts the cut in interest rates, announced yesterday by the Bank of England, will reduce mortgage payments as a proportion of gross income for the average new borrower from 20% to 19%, in line with the average spanning two decades and well under the 34% peak in 1990.
Figures released by the BoE finds the number of loans approved for house purchase during the second quarter is 10% higher than the first period, however still down 18% on the figure posted in the second quarter of last year.
Chief economist, Martin Ellis says the average house price has shown little change during 2005.
He says: “There have been further signs of a modest improvement in housing market activity over the past month. The number of loans approved for house purchase in the second quarter was 10% higher than in the first quarter, and estate agents have reported recent modest upturns in both completed sales and enquiries by potential homebuyers.”
The latest monthly RICS survey reveals a modest rise in completed property sales since February 2005 and the first increase in buyer enquiries for five months during June.
Meanwhile, a report from the Land Registry shows a 5.43% house price increase, the lowest since 1996 and compared with a 16.98% increase during the same period last year.
The residential property price report spans the period between April - June 2005, revealing the average price for a UK property to be at £184,924.
Moreover, the registry finds the volume of sales in England and Wales declined 27.7% from 299,986 in 2004 to 216,890 for the same period in 2005, while first quarter sales retreated by 35% from 243,914 in 2004 to 159,116 in 2005.
It also finds 718 (454 in Greater London) properties over £1m were sold compared to 977 for the same period in 2004, while 70,117 properties were sold for less than £120,000.
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