House prices fell by 0.6% last month leaving the market broadly unchanged, according to the latest Haifax House Price Index.
The lender says the annual rate of house price inflation fell to 5.7% in May, continuing the downward trend from the peak of 22.1% in July 204 and representing the lowest current level of growth in four years.
Halifax says the housing market is operating within a narrow band of price volatility and is flat overall one monthly price rise followed by a fall in prices the following month.
Estate agents have reported broad stability in market activity in recent months although sales remain around 30% lower than last year. The fall in the number of sales persists despite the fact that the number of people putting their property on the market has risen so far this year, reinforcing the shift from to a buyer’s market since last summer.
But although the housing market remains flat, Halifax says it is underpinned by strong economic performance citing the fact that economic growth has continued for the 51st consecutive quarter as of the first quarter of 2005. This also includes record employment levels, low interest rates and the doubling in value of equity values for properties over the past five years.
Halifax says its outlook for the market remains unchanged forecasting a 2% drop in house prices across the UK in 2005.
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