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House prices fall as market falters

Property prices fell for the third month in a row during June as the housing market recovery showed further signs of faltering.

The average cost of a home dropped by 0.6% during the month, following a 0.5% slide in May and a 0.1% decline in April, according to Halifax.

The group said an increase in the number of homes being put up for sale in recent months had eased the mismatch between supply and demand, and reduced the upward pressure on prices.

House prices during the three months to the end of June were 0.1% lower compared with the first quarter of the year.

“This pattern is in line with our view that house prices will be broadly unchanged over 2010 as a whole,” said Halifax housing economist Martin Ellis.

The figures, which follow a raft of recent gloomy data on the housing market, will further stoke speculation that the house price recovery is running out of steam.

The price increases seen during 2009 were fuelled by a shortage of properties on the market.

But estate agents have reported a sharp increase in the number of homes for sale since the Government abolished home information packs.

At the same time, activity in the housing market has failed to pick up significantly following a subdued start to the year.

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