UK property prices record first annual fall in 2010

 
Halifax said house prices fell 0.1% last month, meaning prices in the three months to November fell 0.7% compared with a year ago, the first decline since November 2009. That compared with gains of 1.8% on the month and a three month annual rise of 1.2% in October.
 
Halifax said the average price of a property is now £164,708. ‘Higher numbers of properties for sale, combined with reduced demand, have caused the recent decrease in prices,’ said Halifax economist Martin Ellis.
 
‘The rate of decline in prices on the three month on three month measure has picked up over the past few months, but it remains well below the declines of 5% to 6% in the second half of 2008. The highly mixed picture of monthly house price rises and falls recorded this year continued. Such a varied monthly pattern is consistent with a relatively flat underlying trend for house prices,’ he explained.
 
‘There are, however, some tentative signs that homeowners are becoming more reluctant to put their properties on the market which, if continued, will help to relieve the current downward pressure on prices,’ he said, adding that he did not expect to see a significant fall in house prices going into 2011.
 
Analysts said that the figures reinforce the view that house prices would remain soft in 2011, as tight credit and worries about the economic outlook weigh on people’s ability to buy.
 
‘Latest housing market data and surveys remain consistently weak and the housing market really does not seem to have got much going for it at the moment, said Howard Archer, economist at IHS Global Insight.
 
‘There are some signs that the number of properties coming on to the market are starting to dip, which could provide support to house prices. At the moment though, buyer enquires are slowing more than new houses coming on to the market,’ he explained.
 
‘Critical to the development of house prices over the coming months will be the amount of houses coming on to the market, mortgage availability, and how well the economy and jobs hold up as the fiscal squeeze increasingly kicks in. There are some signs that the number of properties coming on to the market are starting to dip, which could provide support to house prices,’ he added.
 
Other recent indices also show that the market is slowing and stagnating. Nationwide reported a 0.3% fall in house prices in November, while official data showing mortgage approvals fell to an eight month low in October suggest the housing market will remain muted for some time yet.