Halifax: £30k wiped off house prices

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by Kay Murchie

According to the Halifax’s latest survey, house prices continued to fall last month with a 2.2% fall recorded.

This takes the annual rate of fall to 13.7% over the past year and according to the lender, the latest fall takes the average home to £168,176, almost £30,000 less than a year ago.

Britain’s largest mortgage lender said prices are now back to the level of October 2005.

According to the Halifax, when comparing the average price in October with the average price 12 months ago, the survey suggests that prices are down by 15%.

However, the lender argues that this figure can be distorted by month-to-month fluctuations, and believes that a more accurate way is to compare the average price for the last three months with the average price for the same period a year ago, which produces its current estimate of a 13.7% annual fall.

Last week, the Nationwide’s house price index revealed that property prices fell by 1.4% in the last month, taking the annual rate of fall to 14.6%.

According to Martin Ellis of the Halifax, there have been indications that the market was beginning to stabilise despite the continuing falls in house prices. Mr Ellis added that the affordability of homes was improving considerably.

While this might be good news for first-time buyers, the fact still remains that it is increasingly difficult to obtain a mortgage without a hefty deposit, since the credit crunch has meant lenders are only willing to lend to those with an excellent credit rating or a large amount of equity in their properties

The figures from the Halifax come as the Bank of England is widely expected to cut interest rates today by at least half a percentage point to 4%.

While a rate cut should be good news for homeowners, some lenders are yet to pass on the rate cut to borrowers.

Financial information provider, Moneyfacts.co.uk, recently reported that half of the UK’s mortgage lenders had failed to cut their standard variable rates (SVR) in line with the recent interest rate cut.

As a result, a group of more than 20 MPs has tabled a motion in parliament calling for all UK banks to pass on the benefits to customers.