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Tuesday 23rd of June 2009
October 9, 2008

Halifax registers 12.4% annual decline in house prices


by Gill Montia
Halifax registers 12.4% annual decline in house prices

The Halifax has published its house price index for September, showing a 1.3% fall in the average cost of a UK home. The decline brings the year-on-year fall to 12.4%.

According to the UK’s largest mortgage lender, house prices fell 5.2% over the three months to the end of September, taking the average price of a property down to £172,108.

However, the monthly fall was at its lowest for seven months, raising hopes that the market could be bottoming out.

Analysts remain cautious in their expectations for the coming months because lending is expected to remain tight.

The £500 billion rescue package for banks unveiled by the Government yesterday could help to unfreeze the wholesale money markets, bringing down Libor, the interbank lending rate that determines the cost of the majority of UK mortgages.

However, yesterday’s 0.5% cut in the Bank of England’s base rate, to 4.5%, may only be bring immediate relief to those on existing tracker loans or on their lenders’ standard variable rates.

Already Cheltenham & Gloucester, the mortgage unit of Lloyds TSB, has withdrawn a number of its tracker products for new customers and other lenders are expected to follow suit.

The cut is therefore unlikely to assist potential first-time buyers, who could help kick-start the market.

The Halifax figures come one week after Nationwide published its findings for September, showing a 1.7% decline in the cost of the average home and a year-on-year fall of 12.4%.

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