Housing demand expected to grow
Demand for housing is likely to grow in the second half of 2011 as a result of "moderate improvement" in the British economy, experts believe.
Martin Ellis, housing economist for Halifax, said that continuing low interest rates will boost this demand in the second half of the year.
The comments come as data from the financial services provider revealed that house prices increased by 0.1 per cent in May on last month.
In April, property values had dipped by 1.4 per cent when compared with data from March.
Figures from Halifax show that the average property in the UK is now worth £160,519 - which is 4.2 per cent lower than prices reported in May 2010.
"Low earnings growth, higher taxes and relatively high inflation are all putting pressure on household finances," Mr Ellis explained.
"Confidence is also weak as a result of uncertainty about the economic and employment outlook. These factors are probably constraining housing demand and applying some downward pressure on prices."
However, he added that the prospects for the housing market in the near term looked positive.
"Overall, we expect a moderate improvement in the economy during the remainder of 2011, which combined with continuing low interest rates, is likely to support housing demand," the economist concluded.
"This should prevent a further marked fall in prices and help to stabilise property values later in the year."
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