Prices Set to Plateau?
14 October 2008
House prices across the UK fell by 1.3 per cent in September according to the Halifax, but Chief Economist, Martin Ellis, detected tentative signs that the pace of the decline might be slowing.
The lender estimates that prices fell by 5.2 per cent in the last three months. That is almost identical to the 5.1 per cent decline recorded in the previous three months. Martin Ellis commented: "The overall price decrease in the three months to September was very similar to that in the previous quarter, indicating that the trend rate of decline may be beginning to stabilise".
Separate figures for Scotland, where price falls have not been so marked, will not be released until later.
The 1.3 per cent decline in prices in September was the smallest fall since February this year. The month before saw prices down by 1.8 per cent while both March and May saw prices fall by 2.5 per cent. Overall, the Halifax calculates that UK house prices are 12.4 per cent lower than they were this time last year.
The lender argues that the recent cut in interest rates will help mortgage borrowers faced with increasing pressures on their finances and provide a valuable support to the housing market. Nevertheless, reduced mortgage availability and household costs rising faster than incomes will both prevent any short term recovery in the market.