House prices 'reach summer 2006 levels'

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The Independent Online

House prices are now back at the levels seen in the summer of 2006 after rising further in June, according to Land Registry figures today.

But property prices edged up by just 0.1% between May and June as experts said the market was showing signs of reaching a turning point.

June's Land Registry data revealed the average price of a property in England and Wales stood at £166,072 in June, which is 8.4% higher than a year ago.

It marked the eighth month in a row where house prices were higher than a year earlier and meant that values have recovered to the levels recorded in July and August 2006 - a year before the credit crisis struck.

All regions in England and Wales saw increases in their average property values over the last 12 months.

London had the biggest annual rise - up 12.2% - while the smallest increase was registered in the North East, up 0.7%.

However, monthly rises have been slowing since the market began to pick up last year.

Prices stalled in March after a 2.1% leap at the start of the year and the height of the spring selling season saw growth reach just 0.2%.

Paul Diggle, at Capital Economics, said: "Today's Land Registry index adds to the emerging evidence that house prices may have reached a turning point.

"Marginal growth in June does nothing to dissuade us that house prices will fall back in the second half of the year and into 2011," he added.

The figures come as the National Institute of Economic and Social Research (NIESR) warned house prices would fall by around 8% over the next five years, with inflation taken into account, as the Government's austerity measures bear down on the market.

The Land Registry data, which uses values from completed sales rather than asking prices, lags other industry house price indices, which have all pointed to a slowing market.

Halifax recently said property prices fell for the third month in a row during June, down by 0.6% during the month.