House Price Update to 3 August 2011

UK House Prices Situation: Flat or down in most areas

UK House Prices Forecast: More of the same in 2011, except in London

Prices Flat In June But Down 2.5% in 2011 – Land Registry

The latest house price index from the Land Registry shows that there was no change in the average house price from May to June this year but that average prices are down 2.5% over the last twelve months.

As has been seen many times before, London bucked the trend and recorded a 0.8% rise in average house prices over the last twelve months. More interestingly, Wales recorded the biggest monthly rise last month, with average prices increasing 2.8% from May to June. It remains the third worst performer over the last year, however, with average prices down 4.4% since June 2010.

The North East fared worst, with average prices falling by a substantial 7.1% over the last year and 2.1% over the last month.

House Prices Creep Up 0.2% in July

UK house prices rose by an average of 0.2% in July, according to the latest figures from mortgage lender Nationwide. Before you get too excited, however, it is worth noting that based on Nationwide's June average house price of £168,205, this only equates to an increase of £336.

July's 0.2% increase leaves average house prices 0.4% down on July 2010, according to Nationwide's figures, painting a superficial picture of stability – something Nationwide Chief Economist Robert Gardner is keen to endorse: "Stability has been the watchword for the UK housing market over the past 12 months. Sluggish demand for homes, combined with only a gradual rise in the supply of available properties, has helped to keep house prices relatively stable."

However, the reassuring picture painted by Gardner does not tell the whole story. As is apparent from this month's Land Registry figures, regional variations in house prices are far greater and the impact of inflation is having a devaluing affect across the board.

When set against inflation, house prices have, in many cases, fallen further than the house price indices would have you believe.

Read about UK House Price indexes / key statistics that track the ups and downs of house prices

Read our take on the Credit Crisis the effect on UK House Prices and Mortgages. A Special Report

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