House prices slip in June says Halifax

House prices fell by 1.3 per cent over the course of June as the mini-boom which had sustained growth during early 2006 appeared to slip slightly, said Halifax figures.

The bank rapidly qualified the figures by adding that house prices remain 4.5 per cent up on what they were in early January and 9.4 per cent higher than at the same time last year.

It attributed the fall in activity to the World Cup, interest rate nerves and rising utility costs and said that the reversal did not appear to be the beginning of a long term trend.

“Sound fundamentals, underpinned by a strengthening economy, high levels of employment and low interest rates, will continue to support housing demand over the second half of 2006, ensuring that the market remains in good health,” said Martin Ellis, Halifax chief economist.

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

“Pressure on householders’ finances from utility bill and council tax rises, combined with speculation of higher interest rates, are also likely to constrain demand.”

Low interest rates have been instrumental in breathing life back into the market as best mortgage rate deals kept borrowing affordable despite high house prices.

© Adfero Ltd

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