House prices fall to same level as 2009

The average house price was £161,094 last month, which was 0.6 per cent lower than in June and the previous July, according to the Halifax House Price Index.

However, prices have been fluctuating every month and, after rises in May and June, they are still 0.8 per cent higher than in December and roughly the same as in the summer of 2009.

The lender expects prices to remain flat over the rest of 2012 unless the economy deteriorates, with levels of supply and demand set to remain stable.

The recent fluctuation in pricing may have been affected by a rush of first-time buyers looking to beat a stamp duty holiday at the end of March, after HM Revenue and Customs figures showed an 11 per cent fall in sales between the first and second quarters of 2012.

Halifax housing economist Martin Ellis said: “Looking forward, we expect little change in prices over the remainder of 2012, so long as the economic climate in the UK does not worsen substantially.”

There have been worrying signs for the housing market in recent weeks, after Nationwide said prices fell 2.6 per cent in July, representing the biggest annual decline in almost three years.

Amid reports of a very few inquiries from lenders in July Howard Archer, chief UK economist at IHS Global Insight, said the survey fuelled his fears that prices will drop a further 3 per cent.