The average price of a home in the UK remained unchanged at £168,205 in June, signalling renewed weakness in the housing market.
In its latest house price index, Nationwide said prices were flat last month, compared with a rise of 0.3 per cent in May. Prices were down by 1.1 per cent compared with last year.
Robert Gardner, the chief economist at Nationwide, said: “Housing market demand has remained subdued, as evidenced by the still weak level of mortgage applications in recent months and the sluggish pace of new buyer inquiries reported by surveyors.”
The three-month-on-three-month measure of house prices, which economists regard as a better gauge of the underlying trend, was up 0.3 per cent on the back of a buoyant London market, although elsewhere the market was much quieter.
Howard Archer, chief UK and European economist at IHS Global Insight, said: “We suspect that modest overall falls in house prices are more likely than not, over the second half of 2011 and the first half of 2012. On balance, we believe that house prices are likely to fall by around 8 per cent overall from current levels on the Nationwide measure by mid-2012.
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“We anticipate that house prices will soften modestly as squeezed purchasing power, tightening fiscal policy, a soft labour market and worries over the economic outlook weigh down on potential buyers. On top of that, there are still significant difficulties in getting a mortgage, particularly for first-time buyers.”