House prices fall for fourth month in a row

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The Independent Online

House prices fell for the fourth month in a row during December as the property market continued to be hit by the mortgage drought and economic uncertainty.

The 0.2% fall pushed the average house price in England and Wales down to £163,814, just 1.5% higher than at the end of 2009, according to the Land Registry.

The number of homes changing hands also remained subdued towards the end of last year, with just 55,964 sales taking place in October, the latest month for which figures are available.

Transaction levels were 15% lower than in October 2009, although sales volumes were boosted during the final part of that year due to the approaching end of the stamp duty holiday for people buying lower value properties.

Today's figures are the latest in a run of gloomy data on the property market, with the British Bankers' Association last week saying that net mortgage lending by the major banks had fallen to an 11-and-a-half-year low, while the number of mortgages approved for house purchase fell to a near-two-year low.

Howard Archer, chief UK and European economist at IHS Global Insight, said: "Evidence is coming thick and fast at the moment that housing activity remains in the doldrums and prices are slipping.

"We maintain the view that house prices will fall by around 10% from their peak 2010 levels by the end of 2011."

Paul Diggle, property economist at Capital Economics, said: "The latest data from the Land Registry are further evidence of the anaemic state of the housing market.

"Rising unemployment and tight credit conditions are likely to mean that transaction levels remain low and house prices continue to fall."

The South West saw the steepest house price slide during December, with property values falling by 1.2% during the month, followed by the North West at 0.9%.

But at the other end of the scale, prices rose by 1% in London, the first time the monthly change has been above zero since July last year.

Wales also recorded house price increases of 0.5%, while the cost of property rose by 0.4% in the East Midlands and by 0.1% in the West Midlands.

London also saw the strongest year-on-year growth, with house prices 6.2% higher than in December 2009, while in the South East they have risen by 2.7% during the past year.

But prices are lower than they were 12 months ago in six regions, with the North East seeing the biggest drop of 3.3%.