house prices
House prices have been rising fast.Reuters

UK house prices fell by 0.6% in July, the first dip in five months, according to data from Britain's largest mortgage lender Halifax.

The month-on-month figures represent a surprise decrease compared to June, which saw prices rise 1.6%. Halifax's monthly index also showed that annual house price growth fell back, rising 7.9% last month, down from 9.6% in June, the lowest since December 2014.

Howard Archer, chief UK and European economist at IHS Global Insight, said: "The Halifax data have been notably more volatile than other house price measures in recent months and stronger overall than most."

The average price of a flat or house now stands at £198,883.

Archer said that, overall, house prices will continue to rise this year, forecasting house prices to rise by 6% over 2015.

"Latest data and survey evidence largely indicate that housing market activity is on the up, and we suspect it will continue to improve amid generally supportive fundamentals, notably including strengthening earnings growth, higher employment, elevated consumer confidence and very low mortgage interest rates.

"Meanwhile, a shortage of properties coming on to the market is currently exerting increasing upward pressure on house prices," he said.