This represented an improvement on the previous month when this measure of the underlying trend reported a fall of -0.3%.
The decline in July followed two consecutive rises as prices continue to fluctuate on a monthly basis with four monthly rises and three falls this year.
The average UK house price in July 2012 was 0.8% higher than in December 2011 at £161,094.
Nationally house prices are at a similar level to the summer of 2009.
Prices in the three months to July were 0.6% lower than in the same period a year earlier.
This was similar to the fall of 0.5% recorded in June as the annual rate has remained within a narrow range of between -0.1% and -0.6% over the past five months.
A year ago, prices were falling at an annual rate of 2.6% (July 2011).
Martin Ellis, Halifax’s housing economist, said: "At a national level, house prices have been stable over the past year or so.
“This can largely be explained by the static nature of supply and demand conditions during this period. We expect little change in prices over the remainder of 2012 so long as the economic climate in the UK does not worsen substantially."
Capital Economics said the figures were evidence of “mixed messages” in the housing market over the past few months slowly giving way to evidence of a downwards trend.
A spokesman said: “With forward-looking indicators also weak and if anything softening, house prices are likely to show further modest falls over the rest of the year.”
Peter Rollings, chief executive of estate agent Marsh & Parsons, added: “A lethargic mortgage market and faltering economy have conspired to undermine house prices and the performance of central London is masking even greater falls around the country.
“Securing an affordable mortgage without a colossal deposit is an Olympian task for the average buyer and this is reining in competition for properties across the country – preventing sales prices from climbing back to anything like their pre-crunch heights.”
