House prices increased by 0.5 per cent in May to an average £160,941 but are unlikely to move much over the rest of the year, the Halifax said today.
The rise follows a drop of 2.3 per cent in April and rise of 2.2 per cent in March, leaving the current average UK price very similar to the levels both a year ago and at the beginning of this year.
Halifax’s housing economist, Martin Ellis, said: “Whilst there has been a modest improvement in the trend for house prices recently, the current average UK price is very similar to the levels both a year ago and at the beginning of this year.
“We expect this situation to continue, with prices likely to still be around today’s levels at the end of 2012 as the ongoing tough economic environment constrains housing demand.”
Mr Ellis said that recent sales figures had clearly been affected by the ending of the stamp duty holiday for first-time buyers in late March.
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“Overall, the trend for sales - like that for prices - appears to be one of broad stability,” he said.
Other commentators were more downbeat. Howard Archer, chief UK and European economist, at IHS Global Insight, a consultancy, said: “The Halifax data do little to dilute our belief that house prices are likely to trend modestly downwards over the coming months in the face of soft economic fundamentals and low and fragile consumer confidence. Specifically, we expect house prices to fall by around 3 per cent by the end of 2012.
“Furthermore, the danger that house prices could fall even more than this is currently being lifted by the increased downside risks to the UK economic outlook, particularly coming from the heightened tensions in the Eurozone focused on Greece and Spain.”
Ed Stansfield, chief property economist at Capital Economics, another consultancy, said: “House prices are stuck in a rut, at least at the national level.”