House prices continuing to slow say Halifax

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by Kay Murchie

According to the latest monthly survey by the Halifax, property prices are continuing to slow down

The UK’s biggest mortgage lender said prices across the UK fell by 0.3% in February, taking the annual rate of inflation down from 4.5% to 4.2%.

The lender calculated that the average UK home now costs £196,649.

If the economy and employment continues to grow, property prices will be flat over the next 12 months, according to the Halifax.

Martin Ellis, the Halifax’s chief economist, said property prices fell by 0.3% in February. Prices in the three months to February, however, were slightly (0.2%) higher than in the previous quarter.

Whilst the housing market has slowed over the last 6 months, it is supported by sound economic fundamentals. Interest rate cuts by the Bank of England are also helping to underpin house prices, added Mr Ellis.

The UK property market has experienced a considerable decline in activity in the last 12 months.

However, in contrast, the Nationwide building society reported its fourth monthly consecutive price last month. It said the rate of decline was speeding up because prices in the 3 months to February had been 1% lower than in the previous 3.

The Halifax believes the slowdown has been much less dramatic as prices in the 3 months to February were still 0.2% higher than in the previous quarter.

The information indicates that property prices are continuing to cool but are not falling through the floor, concluded Howard Archer of Global Insight.