By David Milliken
LONDON (Reuters) - British house prices unexpectedly dropped for a second month in a row in July, figures from mortgage lender Halifax showed on Wednesday, adding to signs that households are growing warier of making major financial decisions ahead of Brexit.
Halifax said house prices fell 0.2% on the month, compared with economists' forecasts in a Reuters poll for a 0.3% rise, while the annual growth rate for the three months to July dropped to 4.1% from 5.7%, also a sharper decline than expected.
"With Brexit due to occur on 31 October -- and it currently very unclear what will happen then -- uncertainty will weigh down on the economy over the next few months at least and hamper the housing market," economist Howard Archer of consultants EY ITEM Club said.
New British Prime Minister Boris Johnson has told officials to prepare for leaving the European Union without a deal, something many businesses fear would lead to significant short-term economic disruption.
Halifax's annual house price growth rates remain elevated compared with other measures of British house prices -- which point to a broadly flat picture -- and Halifax said its annual figures were boosted by weak prices a year earlier.
The most recent official data, for the 12 months to May, showed annual house price increases of 1.2%, and that prices in London fell by the most since 2009.
"We have seen a reported drop off in the number of properties sold during the early months of summer, which may lead some to speculate a downturn is on the horizon," Halifax managing director Russell Galley said.
But low interest rates and rising wage growth would help prop up prices, he added.
EY's Archer said he expected house prices to rise no more than 1.5% this year.
(Reporting by David Milliken; Editing by Catherine Evans)
