UK house prices fall in June

Brokers remain confident that house prices will continue to rise this year despite new figures showing a fall of 0.2% in June.

The surprise price drop reduced annual house price growth to 3.3%, down from 4.6% in May, according to latest data from Nationwide.

Robert Gardner, Nationwide's chief economist, said: “This maintains the gradual downward trend that has been in evidence since mid-2014, with the smallest annual rate of increase for two years.”

Stephen Smith, director, Legal & General Mortgage Club and Housing, said the slowdown in house price inflation was good news for those looking to get on the property ladder.

“However, we don’t expect this trend to last. The current level of housing supply is insufficient to cope with demand and this will drive up prices in the remainder of the year.”

Prices are still climbing well above the inflation rate, Smith said, making it difficult for aspiring homeowners to enter the market. “We need an extra 250,000 homes per year so that there are enough properties for people to buy.”

Paul Smith, chief executive of haart estate agents, said the fall in prices was a step in the right direction for affordability. "But we are still finding that demand for homes is outpacing supply.

“Our data shows there are now 11 prospective buyers chasing each new property instruction across the UK, compared to eight at the same time three years ago.

“The formation of property chains is still proving difficult, while many are keen to move, the difficulty is in securing an onward purchase.

“This is having a stagnating effect and there is a desperate need for a more liquid market, through an injection of supply."

Ben Thompson, managing director at estateagent4me.co.uk was optimistic about the outlook for the rest of the year.

"Providing the economic climate remains broadly positive and consumers feel confident, we would expect price rises nationally, with real upward pressure in some pockets.

“This would reflect the very strong demand for property, chasing much reduced supply.”

New research from Clydesdale and Yorkshire Banks has revealed that optimism in the property market has slowed down, with fewer homeowners anticipating an increase in the value of their home over the next 12 months.