Mixed signals from the housing and new car markets reinforced market expectations that the Bank of England will leave interest rates on hold at 0.5 per cent and continue to pause its quantitative easing (QE) programme when it unveils its next move at noon today.
In the latest in a series of choppy readings, Halifax announced a bounce in house prices in June of 1.2 per cent, which follows a rise of 0.4 per cent in May and a fall of 1.4 per cent in April. But analysts were quick to discount the latest news as a sign of any substantive trend improvement, forecasting moderate falls in real-estate values over the next year or more.
The Halifax's data is slightly more positive than the Nationwide data released last week, which showed house prices were flat in June. Most measures show values declined by 1 to 2 per cent over the past year.
Paul Diggle, a property economist at Capital Economics, said: "The bounce is unlikely to signal that the downwards pressure on house prices has abated. With the squeeze on real pay likely to intensify until well into next year, house prices still have further to fall."
On the Halifax's figures, house prices last peaked at £168,593 in April 2010 and fell to £160,393 in April 2011 before moving back up to £163,049 in June. Thus, prices in June were 3.3 per cent below their April 2010 peak, and 18.3 per cent below the all-time high of £199,612 seen in August 2007. Adding in inflation, the real-terms paper loss of value for homeowners since the end of the boom is about a third.
In terms of the second most expensive purchase most people make, car registrations fell again in June, for the sixth successive month, with sales down by 6.2 per cent on this time last year. But that marks a slowdown in the pace of decline, and stronger fleet sales making up for some of the softness in private buyer demand.
Paul Everitt, chief executive of the Society of Motor Manufacturers and Traders, said the sales figures were in line with expectations.Reuse content