Residential UK house prices fell back by 0.6% in June and values are now 1.5% lower than a year ago, according to the latest property price index from the Nationwide.
The price of a typical home is now £165,738 and all regions are seeing no growth in their property markets with the outlook uncertain. Growth is now at its lowest since August 2009.
‘The slightly weaker trend we've observed since March is unsurprising, given the difficult economic backdrop, with the UK economy dipping back into recession at the start of the year and few signs of a near term rebound,’ said Robert Gardner, Nationwide's chief economist.
‘Part of the weakness in house prices may also relate to the ending of the stamp duty holiday in March, which provided a temporary boost in early 2012, as buyers brought forward purchases that would otherwise have taken place later in the year,’ he added.
Economic conditions are expected to remain challenging over the next twelve months but Gardner believes that policymakers' efforts to bolster the supply of credit to the economy and to help lower the cost should provide support to demand.
‘Moreover, the supply side of the market is still constrained, with construction failing to keep pace with the number of new households being formed,’ he said.
‘Overall, this suggests a continuation of the pattern experienced over the past two years, with prices remaining fairly stable over the next twelve months,’ he added.
All regions are affected with nine out of 13 UK regions seeing annual price falls in the second quarter of 2012, the index also shows.
The North/south divide persists for English house price performance and Northern Ireland continues to see the largest price falls while the most expensive region is still London.
London saw the strongest quarterly growth rate, with prices up 1% quarter on quarter. Whilst the annual rate of growth moderated a little from 2.3% to 1.2%, average prices in the capital have now virtually recovered to their 2007 peak.
House price growth in southern England including the South West, Outer South East, Outer Metropolitan, London and East Anglia, exceeded that of northern England including the West Midlands, East Midlands, Yorkshire and Humberside, North West and the North for the thirtieth consecutive quarter. The North West was the worst performing English region, with prices down 4.1% year on year.
Scotland was the worst performing area on a quarterly basis, with prices falling 2.% during the second quarter. This pushed the annual rate of change down to -2.3%.
Wales saw a third successive quarter of price falls, with a seasonally adjusted fall of 1.1% in the second quarter. On an annual basis, prices were down 5.3% compared with 2011.
Northern Ireland continued to see price falls, with average prices down 10.6% year on year.