House prices hold steady in June

The number of mortgages approved has jumped to a 17-month high

House prices held steady for the second month running during June as demand from potential buyers continues to outstrip the supply of homes on the market, research shows.

The average cost of a property in England and Wales remained unchanged during the month at £155,600, according to housing intelligence group Hometrack.

The annual rate at which house prices are declining also continued to ease, with property values 8.7% lower year-on-year in June, down from a 9.6% drop in May.

The group said rising sales volumes, a dwindling supply of homes on the market and a continued increase in demand were all helping to underpin prices at their current level.

Only 3% of postcode areas saw price falls during month, down from 32% in April and around 60% at the beginning of the year.

Richard Donnell, director of research at Hometrack, said: "A lack of supply and rising demand have combined to prop up house prices in the last two months.

"Over the last six months, the volume of buyers has grown by 36%, this compares to a 6.4% increase in the number of homes for sale."

Estate agents reported a further 5% increase in registrations from potential buyers during June, but there was only a 0.8% increase in the number of properties that were put on the market during the month.

The mis-match between supply and demand contributed to the average time for which a property is on the market dropping for the fifth month in a row to 9.4 weeks, while the percentage of their asking price that sellers achieved rose for the fourth consecutive month to 91%.

Sales levels also rose by 4.6% in June, and transaction volumes are now up by more than 80% since the beginning of the year, although the group cautioned that this was off a very low base.