LONDON (MNI) – UK house prices showed their largest monthly fall in
at least 27 years in September, according to the Halifax house price
survey.
Halifax said that prices had fallen by 3.6% on the month, leaving
the annual increase in prices at 2.6%. The monthly fall is the largest
recorded in the Halifax series, which started in 1983.
But Halifax warned that the monthly change could give a
misleadingly weak picture of the UK house market and noted that prices
had fallen by only 0.9% in the latest three months as a whole, in line
with other leading surveys.
Commenting, Martin Ellis, housing economist, said that it was still
too early to start talking about a sustained decline in house prices:
“Looking at quarterly figures – a better measure of the underlying
trend, house prices in the third quarter of 2010 were 0.9% lower than in
the second quarter of 2010. This rate of decline is significantly
slower than the quarterly changes of between -5% and -6% that were seen
in the second half of 2008. It is therefore far too early to conclude
that September’s monthly 3.6% fall is the beginning of a sustained
period of declining house prices.
Supply and demand explained the way prices had withstood the
weakness in the real economy last year and a pickup in supply this year
had reduced this imbalance in favour of buyers.
Ellis continued:
“At the same time, renewed uncertainty about the economy and jobs
has caused consumer confidence to falter recently, dampening the demand
for home purchase. Together, these factors have been exerting some
downward pressure on prices in recent months”.
Low transaction levels had also increased the volatility of the
month on month measure, he said.
Halifax said that prospects for the housing market remain
uncertain, with earnings growth weak and tax rises on the way.
–London newsroom: 44207 862 7491; email: ukeditorial@marketnews.com
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