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House prices fall 1.4%

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  • 09/05/2011
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House prices fall 1.4%
House prices across the UK fell 1.4% in April, as the underlying trend continued to be one of “modest decline”, according to Halifax.

The fall followed no movement in March. Halifax’s figures revealed that the average house price in April was £160,395, down 3.7% on the same month last year – the biggest annual decline since October 2009.

On a quarterly basis, prices were down 1.2%.

Nevertheless, average property prices remained 4% above the low reached in April 2009, but 20% off their August 2009 peak.

Martin Ellis, housing economist for Halifax, said: “The latest figures show that the underlying trend in house prices continues to be one of modest decline.

“Weak confidence amongst households, partly due to uncertainty over the economic outlook, is constraining housing demand and resulting in some downward movement in prices.”

However, he added: “Signs of a modest tightening in housing market conditions, a relatively low burden of servicing mortgage debt and an increase in the number of people in employment are all likely to be providing support for house prices, curbing the pace of decline. There are signs that house sales are stabilising albeit at a level lower than the historical average.”

The ratio of house sales to unsold stock on surveyors’ books increased slightly in March for the second consecutive month and was higher than levels recorded in the second half of 2008 and early 2009 when house prices fell sharply.

Halifax said that a lower level of properties available for sale largely explains why current market conditions are tighter than in that period.

In addition, house sales appear to be stabilising, with the number of mortgages approved increasing 2% between February and March, according to the Bank of England. Approvals in Q1 2011 were also 2% higher than in Q4 2010.

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