UK's average house price falls by 1.3% in 2011


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The Independent Online

The UK's average house price fell by 1.3% in 2011 after a monthly decline of 0.9% between November and December, lender Halifax said today.

With prices having "held up" well during the year, the bank added that it was hopeful of a similar performance in 2012 if the UK can avoid recession.

Halifax housing economist Martin Ellis said: "There is, however, considerable uncertainty regarding the prospects for the UK economy which will, to a large extent, depend on how events in the eurozone unfold.

"In addition, the extent to which households choose to reduce their debts will also affect growth. As a result, the outlook for house prices is also uncertain."

The average house price at the end of 2011 stood at £160,063. with prices down 0.1% in the final quarter after falls in November and December offset a 1.2% rise in October.

Mr Ellis added: "Whilst there was a modest fall overall in prices during 2011 with an annual decline of 1.3% in December, house prices held up well last year in the face of the difficult and deteriorating economic climate and substantial pressure on households' finances."

Halifax said there was a mixed picture during 2011 with six monthly falls, five increases and one month of unchanged prices.

But there was an improvement in the annual rate from a decline of 4.2% in May to a drop of 1.3% at the end of the year.

Halifax said recently that prices are likely to be strongest in London and the South East as these regions perform better economically.

Prices elsewhere are expected to be constrained by weaker economic performance and their greater dependence on public sector employment, it added.

While admitting that its forecasts are subject to much uncertainty, Halifax said its best estimate showed the UK's average house price was likely to be between 2% higher and 2% lower at the end of 2012.