–Adds Detail To Version Transmitted At 0626 GMT Wednesday
–House Prices Up 0.6% m/m In July; Up 4.9% 3m y/y

LONDON (MNI) – UK house prices rebounded in July according to the
latest Halifax survey, confounding analysts’ expectations.

July house prices were up 0.6% on the month to stand up 4.9% on
the year, reversing the 0.6% monthly fall seen in June. The July survey
from rival mortgage lender Nationwide showed house prices falling 0.5%
on the month in July, and analysts had predicted the Halifax survey
would show another monthly decline.

In the Halifax series, average house prices are 16% below their
August 2007 peak but 8.3% up from their trough in April last year.

The Halifax said “housing market activity is broadly stable.”

Halifax analysis attributes the resilience of house prices to the
relative affordability of mortgage payments as a result of historically
low interest rates.

It said typical mortgage payments for a new borrower have fallen
below their long run average of 37%, dropping from a peak of 48% of
average disposable earnings in 2007 Q3 to 30% in 2010 Q2.

The underlying picture for house prices so far in 2010 is, however,
broadly flat, with July house prices 0.8% lower than at the end of last
year.

Martin Ellis, Halifax housing economist, said “Overall, there has
been little change in prices during 2010 so far. The mixed pattern of
monthly rises and falls over the first seven months of the year is
consistent with a slowing market.”

Ellis added that the data support Halifax’s views that house prices
“will be broadly unchanged over 2010 as a whole” with the rise in the
number of properties up for sale counteracting the supportive effects of
low interest rates and a recovering economy.

Halifax is part of the Lloyds banking group, which unveiled its
first half results Wednesday. The time of the release of the Halifax
house price survey was brought forward to tie in with the 0600 GMT
release of the Lloyds results.

Lloyds, which is more than 40% owned by the UK government, posted a
first half pre-tax profit of stg1.603 billion, compared with a loss of
stg3.96 billion a year ago, with a sharp improvement in bad debt charges
bolstering the results.

–London newsroom: 44207 862 7491; email drobinson@marketnews.com

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