House prices show signs of stabilising

The bank added that prices were up on a quarter-to-quarter basis for the first time in 14 months, following a 0.5 per cent rise in the three months to July.

With little change in either the level of house sales or the number of properties on the market since late 2010, Halifax said the steady market conditions have helped to stabilise house prices.

Halifax housing economist Martin Ellis said: “This pattern is expected to continue over the rest of the year with little genuine direction in either house prices or sales.”

The average UK house price in July was marginally higher than in December on a seasonally adjusted basis at £163,981. However the figure is still 2.6 per cent lower than a year earlier, based on the average for the three months to July.

Despite yesterday’s improvement, IHS Global Insight chief economist Howard Archer said he feared squeezed purchasing power, spending cuts, a softening labour market and concerns over the economic outlook will weigh down on potential buyers and dampen house prices.