Property market stabilises

HOUSE PRICES rose by 0.3 per cent in June following two months of falls, giving a picture of broadly stable prices, according to the Halifax Building Society, writes Vivien Goldsmith.

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.