House prices drop 1.2% says the Halifax
Wednesday 07 September 2011
House prices dropped 1.2% last month, the Halifax said today, ending three months of price rises.
The average price of a house fell month-on-month to £161,743 in August, although the "more reliable" quarterly change showed a 1% rise.
Martin Ellis, housing economist at Halifax, said prices and activity in the market should be stable over the coming months.
The findings are in line with fellow lender Nationwide, which saw prices drop 0.6% in August but reassured the decline did not change a "relatively stable" picture.
House prices peaked at £168,593 in April 2010 and fell to £160,393 in April this year before moving back up to £163,765 in July.
Howard Archer, chief UK and European economist at IHS Global Insight, said today's figures reinforced the belief that house prices would come down over the coming months. IHS forecasts prices falling by around 5% by mid-2012.
Mr Archer said: "We suspect that squeezed purchasing power, tightening fiscal policy, a softening labour market and persistent serious concerns over the economic outlook will limit potential buyers and weigh down on house prices."
The fall in prices comes as activity in the housing market remains low.
While the Bank of England reported that mortgage approvals for house purchases rose modestly to a 14-month high of 49,239 in July, this was still substantially below a monthly average of around 90,000 since 1993.
The main support for house prices will come from the fact that interest rates are likely to remain very low for some time, analysts added.
Nicholas Ayre, a director of UK buying agents Home Fusion, said a double-dip recession was becoming more realistic and if the economy goes down the property market will go down with it.
He said: "The low interest rate environment, competitive mortgage finance and the low supply of housing are providing a degree of support to prices, but there is no guarantee they will withstand the weight of economic collapse."
South Korea ferry: Vice principal rescued from sinking ship found hanged
Missing Malaysia Airlines Flight MH370: Wreckage could be found within a week as search reaches 'very critical juncture', says minister
Royal Tour 2014: Is the Duchess of Cambridge the only person ever to climb into a fighter jet wearing a dress and high heels?
Kim Jong-un, crowds and contraband: Inside North Korea with the Pyongyang marathon winner
Cover up! Mother told to show less cleavage during Disneyland family trip: 'Are we supposed to wear turtlenecks our whole lives?'
The food poverty scandal that shames Britain: Nearly 1m people rely on handouts to eat – and benefit reforms may be to blame
US Navy christens huge $3 billion destroyer ship USS Zumwalt that appears as a fishing boat on enemy radar
Scottish independence: It is the English who should be on their knees, begging the Scots to vote ‘No’
Nigel Farage fatigue? Half of voters ‘immune’ to Ukip’s appeal
'Sinful': Video of British Muslims dancing to Pharrell Williams's hit Happy comes under attack
Nigel Farage: I’m taking on the status quo, and the Establishment’s fighting back
- 1 'Natural' energy drink banned for containing erectile dysfunction drug
- 2 Dylan Tombides: West Ham confirm 20-year-old striker has died after battle with cancer
- 3 Loch Ness Monster found on Apple Maps?
- 4 Angus Steakhouse: How does tourist staple continue to thrive in today's gourmet market?
- 5 Cover up! Mother told to show less cleavage during Disneyland family trip: 'Are we supposed to wear turtlenecks our whole lives?'
£150.00 per week: QA Apprenticeships: This company is a company that specializ...
£153.75 per week: QA Apprenticeships: This company is an innovative outsourcin...
£150.00 per week: QA Apprenticeships: This company has been providing on site ...
£150.00 per week: QA Apprenticeships: We've been supplying best of breed peopl...