U.K. home prices fall for first time in five months: Halifax

New homes at a residential housing development in the Nunhead district of London, UK.
New homes at a residential housing development in the Nunhead district of London, UK.PHOTO: BLOOMBERG

LONDON (BLOOMBERG) - U.K. house prices fell for the first time in five months in July, according to Halifax, which said the overall trend of rising values may nevertheless recover.

The average cost of a home dropped 0.6 per cent to an average 198,883 pounds (S$430,000) from June, when they surged 1.6 per cent, the mortgage lender said on Thursday. On a less- volatile quarterly basis, prices rose 2.4 per cent in the three months through July and were up 7 per cent from July 2014.

With the supply of homes for sale at a record low and the economic recovery fueling demand, upward pressure on house prices across the U.K. will be maintained, Halifax said.

In addition, the Bank of England will probably keep its key interest rate at 0.5 per cent at noon in London, according to economists, helping to hold down borrowing costs.

"The underlying pace of house price growth remains robust notwithstanding the easing in July," said Stephen Noakes, managing director at Halifax.

"This combination of well- supported demand and tight supply is likely to ensure that house price growth remains relatively strong in the near-term."