UK property prices drop in June

The Halifax house price index has reported that the prices of residential UK property decreased by 1.2 per cent in June compared to the previous month.

House prices in the UK saw an overall increase of 4.5 per cent in the first half of 2006, however, and a rise of 2.6 per cent in the second quarter of this year.

This second quarter rise was noted in all regions of the UK except for Wales, which saw prices drop by 0.8 per cent, with the biggest increases seen in Scotland at 5.7 per cent and the south-west at 3.8 per cent.

While prices for UK property mostly increased for the first half of 2006, the actual level of activity in the market was fairly moderate, with the number of mortgage approvals for house purchase decreasing by four per cent between March and May compared to the preceding three months.

Martin Ellis, chief economist at Halifax, said: “House prices fell by 1.2 per cent in June.

“The annual rate of house price inflation…is expected to ease, partly because the corresponding figures last year were strong.”

It was noted that, while demand is expected to be healthy in the second half of 2006, owing to high employment and low interest, it may be somewhat constrained by issues such as council tax and utility bill rises.

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