Gary Marsh, chief economist at the Halifax, Britain's largest mortgage lender, said that the slight rise was expected after recent falls. Prices are 1.5 per cent higher than a year ago, and Mr Marsh expects property values at the end of the year to be 2 to 3 per cent higher than at the beginning of 1994. After taking inflation into account, this is unlikely to represent a real increase in house prices.
The property market is usually buoyant in June, so the rise of 1.1 per cent, after taking seasonal variations into account, is brought down to a 0.3 per cent rise. This follows a seasonally adjusted fall of 1.7 per cent in May, according to the Halifax.
Adrian Coles, director-general of the Council of Mortgage Lenders, said: 'There is little evidence for anything other than a painfully slow recovery from the recession. It is not clear that even the modest growth seen over the last year will continue.'
The Halifax warned that interest-rate rises to limit the general recovery in the economy could damage the fragile housing market recovery.Reuse content