House prices cool futher in February

| March 6, 2008 | 0 Comments

The UK’s biggest mortgage lender has confirmed the continued slowdown in the UK housing market.

According to the Halifax monthly house price index, the price of a home fell across the UK in February, by 0.3%.

The decline takes the annual rate of inflation down from 4.2% (compared with 4.5% in January) and means the average UK home now costs £196,649.

Halifax chief economist, Martin Ellis, points out: “Prices in the three months to February, however, were marginally (0.2%) higher than in the previous quarter.”

The lender is predicting that property inflation will remain flat over the coming year, stating: “Whilst the housing market has slowed over the past six months, it is supported by sound economic fundamentals. Interest rate cuts by the Bank of England are also helping to underpin house prices.”

While Halifax concedes that the UK property market has seen a “significant” decline in activity in the past year, its outlook is more optimistic that that of Nationwide, which believes the pace of decline has been accelerating.

Howard Archer of economic forecaster, Global Insight, says: “Overall, the data suggest that house prices are continuing to cool markedly, but they are not plunging through the floor.”

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