British house prices in first drop for five months

British home prices fell for the first time in five months during July, when they dropped 0.5 per cent compared with June, a key survey by home-loans provider Nationwide showed last Thursday.

"So far in 2010, demand from homebuyers has made little progress in building upon the recovery seen during much of 2009," said Nationwide's chief economist Martin Gahbauer.

"The number of properties changing hands across the UK is still running at only half the levels seen prior to the financial crisis and recession," he added. House prices rose by 6.6 per cent in July from the same month in 2009 - a marked slowdown compared with June's annual figure.

"There was also a sizeable drop in the annual rate of house price inflation from 8.7 per cent in June to 6.6 per cent in July, due in part to the strength of house price gains in the same month last year," said Gahbauer.

"It will take several more months to establish whether house prices are now simply oscillating around a flat price trend or whether a period of downward trending prices may be in store," he added.

The average value of a home in Britain stood at £169,347 pounds (€202,652) in July, according to the Nationwide survey.