Values remain at May level thanks to restricted supply and rising demand, with sale volumes up 80% since January

House prices were unchanged in June as restricted supply and rising demand helped to maintain values, according to the latest survey from Hometrack.

The UK housing intelligence group said the average cost of a property in England and Wales stayed at £155,600 this month.

The annual rate of decline continued to ease, with house prices 8.7% lower than this time last year, down from a 9.6% year-on-year fall in May.

Estate agents reported a 5% increase in potential buyers coming to the market in June, with only a 0.8% increase in the number of new properties put up for sale.

Hometrack's director of research, Richard Donnell, said: “The lack of housing for sale looks set to remain a continuing theme for the foreseeable future.

Homes for sale
Credit: I See Modern Britain
The average length of time a property spends on the market has fallen from 12 weeks to 9.4 weeks

“The buoyant economic conditions of the last decade saw a high amount of discretionary housing moves funded by easy availability of credit. The simple truth is that the majority of households either do not need to move, are unable to afford a move or just do not have the confidence to move home.”

Hometrack said that a key driver of improving market sentiment was a continued pick-up in sales. Volumes were up by 4.6% in June for the fifth month in a row and have risen by more than 80% since the start of the year.

The average time for a house to be on the market also dropped for the fifth consecutive month, to 9.4 weeks, down from 12 weeks at the start of the year. And the percentage of the asking price achieved by sellers rose for the fourth month in a row, to 91%, up from 88.3% in February.

But Donnell warned that talk of green shoots might be premature. He said: “The jury is still out as to whether the momentum gained over the spring and early summer can be maintained for the rest of the year.

“The two key risks for the market are either a renewed weakening in demand or a surge in the volume of housing for sale. Given the uncertain outlook for the economy it is the demand side where the greatest risk lies as many would-be buyers continue to remain cautious or are unable to obtain sufficient equity or finance to access the market.”

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