British house prices down 0.5% in July

LONDON: A major mortgage lender says that average house prices in Britain fell by half a percent in July, the first drop since February.

Despite the monthly fall, the Nationwide Building Society said Thursday that house prices in the three months through July still rose 1.3 percent from the previous three months.

The market remains subdued though. Nationwide's economist Martin Gahbauer said the number of transactions is still about half what is normal. He blamed that on the difficulty of getting financing and continuing uncertainty about the economy.

David Smith of the Carter Jonas property consultancy says a two-tier market appears to be developing, with good demand and firm prices for more expensive properties but a depressed market for cheaper housing.