Property prices slumped 4.2 per cent in the last year. The average home saw £6,688 shaved off its value – £18.32 a day – according to the latest Halifax House Price Index.
The annual fall in prices is the fastest for 19 months, leaving the average home worth £160,519. However, over the quarter to the end of May prices have fallen just 1.2 per cent and have actually risen by a minuscule 0.1 per cent – £126 – over the month.
Martin Ellis, the housing economist at the Halifax, said the property market was continuing to drift modestly downwards. "Low earnings growth, higher taxes and relatively high inflation are all putting pressure on household finances," he said. "Confidence is also weak as a result of uncertainty about the economic and employment outlook. These factors are constraining housing demand and applying some downward pressure on prices."
The figures are considerable bleaker than those from the Nationwide, published last week, which showed an annual decline of 1.2 per cent. But Mr Ellis predicted the property market would stabilise later in the year.
"An improvement in the economy during the remainder of 2011, combined with continuing low interest rates, is likely to support housing demand. This should prevent a further fall in prices and help to stabilise property values."Reuse content