Halifax reports fall in house prices

| November 6, 2012
Halifax reports fall in house prices

House prices in the three months to October fell by 1.2 per cent compared with the previous three months, the Halifax said.

According to the Halifax House Price Index, the average house price fell to £158,426 in October 2012, a fall of 0.7 per cent compared with the previous month, and 1.7 per cent lower than the average house price in October 2011.

The struggling UK economy has contributed to a slump in demand for property, although recent figures suggest that economy is improving.

Martin Ellis, housing economist at the Halifax, said: “Recent encouraging developments relating to the level of overall economic activity and conditions in the labour market … may help to support demand and underpin house prices around current levels over the coming months”.

There was a small increase in mortgage approvals in September, representing the third successive monthly increase.

The industry-wide number of mortgages approved to finance house purchase increased by 4 per cent to 50,000 in September.

However this is 2 per cent lower than mortgage approvals in September 2011.

Last week Nationwide building society reported an increase in house prices in October.

The building society reported a 0.6 per cent increase in house prices last month, with the average cost of a property reaching £164,153.

According to Nationwide’s monthly house price index, prices increased by 0.5 per cent in the three months to October, the first quarterly increase since January.

Nationwide’s chief economist, Robert Gardner, said that the figures show “a picture of relative stability”.

“Wage growth is still not keeping up with the cost of living and unemployment is still well above normal levels.

“This helps to explain why housing market activity has remained subdued, with the number of mortgage approvals still running at little more than half their long-run average,” he said.

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