Sluggish house price growth looks set to continue after the latest index released today shows a continual decline into June - albeit just 0.6 pct.
The survey, which takes into account any short-term fluctuation such as the General Election, show that over the last three months, prices are on average are 6.3 pct than last year although economists remain pessimistic at the chances of a return to growth:
"It is hard at this stage to be optimistic about house prices in 2011 as the fiscal squeeze will increasingly kick in, which will hit people's pockets and lead to serious job losses in the public sector." said Howard Archer at IHS Global Insight.
A flood of properties to the market has been blamed for the depression in prices after changes in the UK's Capital Gains Tax meant that selling 'second' homes would be subject to higher tax from June's Budget.
However, Ross Walker, economist at RBS said that house price inflation remained 'resilient' despite the anaemic growth in mortgages and prices suggesting buyers were still prevalent.
Commenting, Martin Ellis, housing economist at Halifax, said today:
"House prices fell by 0.6% in June following a similar decline in May. Prices in the April to June quarter were largely unchanged compared with the first three months of the year. This continued the slowdown in house price growth since the beginning of the year following the moderate recovery in prices during much of 2009. This pattern is in line with our view that house prices will be broadly unchanged over 2010 as a whole."
"A shortage of properties for sale in 2009 contributed to an imbalance between supply and demand and was a key factor driving up house prices last year. An increase in the number of properties available forsale in recent months has helped to reduce the imbalance, relieving the upward pressure on prices. Thelow level of interest rates, however, continues to support housing demand."