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The price of a typical UK property inched up by 0.1% in June, according to latest figures released by Nationwide, based on mortgage approvals for house purchase. This compares with a 0.5% monthly increase in May.

House prices increased by 3% in the first half of the year, while the annual rate of house price inflation has dropped from 9.8% to 8.7%. The average house price in June 2010 is now £170,111 compared with £169,162 in May.

Commenting on the figures Martin Gahbauer, Nationwide's Chief Economist, said: "The month of June presented a picture of broad stability for the housing market. The price of a typical UK property rose by a seasonally adjusted 0.1% month-on-month (m/m), following a 0.5% increase in May. The smoother 3 month on 3 month rate of change rose marginally from 1.7% to 1.8%. By contrast, the annual rate of house price inflation dropped for the second consecutive month from 9.8% to 8.7%, reflective of the fact that house prices were increasing at a faster pace this time last year.

"Barring a significant pick-up in house prices over the next few months, the annual rate of inflation should continue to drift lower, in light of the very strong price increases recorded during the summer of 2009. Over the first half of 2010, UK house prices have risen by a cumulative 3.0%.

"Recent indicators point to an increase in the supply of property coming to the market for sale, perhaps in response to the abolition of HIPs in the opening days of the new coalition government. With the level of demand remaining broadly stable, this would in part help to explain the recent slowdown observed in the rate of house price inflation."

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