Halifax reports 1.2% fall in August house prices

| September 7, 2011 | 0 Comments

The Halifax has today revealed UK house prices fell by 1.2% in August on a monthly basis – reversing the gains noted in the previous three months.

The latest fall takes the average cost of a UK home to £161,743, the Halifax said.

However, on an annual basis, prices are 2.6% lower, said the lender, which is now part of the Lloyds Banking Group.

When comparing prices in the three months to the end of August with the previous quarter (which is a more reliable indicator), there was a rise of 1%.

Uncertainty surrounding the economy drove prices lower in the first part of the year and the housing market will remain subdued in the short-term but many reports suggest prices will stabilise throughout the remainder of the year.

Commenting on today‘s report, Halifax housing economist Martin Ellis said: “Low interest rates are likely to continue to support the market whilst increased uncertainty about the economic outlook and pressures on householders’ finances constrain demand.”

Mr Ellis said he expects prices and activity to stabilise in the short-term but a possible double dip in the economy could mean the property market will suffer as a result.

In comparison, last week the Nationwide said house prices fell by 0.6% in August – the fastest pace since October 2010.

On an annual basis, house prices are now 0.4% lower than this time last year with the average UK home costing £165,914, according to the Nationwide.

The housing market has suffered in recent years due to a lack of mortgage availability – particularly for first-time buyers.

Without a substantial deposit, many have been unable to secure a mortgage. However, figures show that those who can scrape enough funds together for a deposit, average mortgage rates have fallen.

Mr Ellis said a recent fall in average mortgage rates “has boosted home affordability for those able to raise a deposit to make a new purchase.”

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