THE PRICES of houses decreased last month, according to new data released this week.

From June to July 2005, house prices stalled over the last month, recording a slight decrease of 0.3 per cent according to data released by web-based company SmartNewHomes.com.

This dip follows two consecutive months of positive price growth after consistent decreases since November last year.

David Bexon, managing director of SmartNewHomes.com, said: "We expect to see a slight decrease in prices and stagnation in activity at this time of the year as both buyers and sellers take a break from the market over the summer months.

"In addition, the anticipation of the base rate reduction effectively paused activity as many people waited to see which way the Bank of England would move."

Annually, prices in July 2005 were down 4.3 per cent from the previous year, which is the fifth month of negative annual price inflation this year.

Mr Bexon added: "We are now likely to see the market liven up coming out of the summer lull over the next month or so as activity increases.

"If the wider economic conditions permit a further reduction in the base rate, then it would not be surprising to see house prices returning to comfortable levels of positive inflation by the end of the year."