U.K. house prices fell in June as the economy struggled to rebound from a recession and the end of a tax break continued to weigh on demand, Nationwide Building Society said.
House prices fell 0.6 percent in June after a rise of 0.2 percent in May, leaving prices 1.5 percent lower than a year ago, the lowest reading for annual growth since August 2009.
"The slightly weaker trend we've observed since March is unsurprising, given the difficult economic backdrop, with the UK economy dipping back into recession at the start of the year and few signs of a near-term rebound," said Nationwide's chief economist Robert Gardner in a statement.
According to Gardner, house price outlook remains highly uncertain. While economic conditions are set to remain challenging over the coming twelve months, policymakers' efforts to bolster the supply of credit to the economy should support demand.
Overall, it is likely to continue to reveal the pattern experienced over the past two years, with prices remaining fairly stable over the next twelve months, said Gardner.
The current weakness in the housing market may also reflect the ending of a tax break for first-time buyers in March, Nationwide said. That exemption, on homes costing less than 250,000 pounds, boosted demand at the start of the year.
Data today may confirm an earlier estimate that the economy shrank 0.3 percent in the first quarter, putting the U.K. into its first double-dip recession since the 1970s. The Office for National Statistics will publish the data at 9:30 a.m. in London.
