House prices fell for the first three months of 2011, making it four successive quarters of declines, with experts predicting worse to come.
The Halifax house price index revealed yesterday that values had fallen on average by 2.9 per cent in the three months to the end of March over a year earlier to £162,912. There was a decline of 0.6 per cent over the pervious quarter.
Month on month, house prices increased by 0.1 per cent in March, but the measure has been notoriously volatile. February saw a fall of 0.9 per cent following a rise of 0.8 per cent in January. Halifax's housing economist, Martin Ellis, said: "Our forecast remains for a 2 per cent decrease in house prices in 2011 as a whole. Uncertainty over the general economic outlook and individual financial circumstances are likely to constrain housing demand, resulting in some modest downward pressure on prices."
Howard Archer, an economist at IHS Global Insight, was more bearish: "Despite the modest rise in March, we maintain the view that house prices will fall by around 5 per cent overall in 2011 and end up losing around 10 per cent from the peak levels seen in the first half of 2010."
Yet, the average price of £162,912 last month marked a 3.3 per cent fall over a year earlier. In March 2010, prices peaked at £168,435, according to Halifax's measure. Mr Archer said: "We suspect that the tighter fiscal policy really kicking in from April and likely gradually rising interest rates will exert downward pressure on the housing market."
The likely rise of unemployment, the decline in real income, the high levels of debt and the issues around getting a mortgage "do not bode well for house prices," Mr Archer added.Reuse content