Lloyds Share News (LLOY)

There was some good news for hard-pressed first-time home buyers as UK house prices continued to weaken in October, although their already entrapped and indebted brethren may feel otherwise.Figures from mortgage provider Halifax, part of Lloyds Banking, indicate that the average price of a house fell 0.7% month-on-month in October to a seasonally adjusted £158,426.The average selling price in October was down 1.7% year-on-year, while in the three months to the end of October prices were down 1.2% on the preceding three months. The quarterly decline was the fifth successive such decline in the underlying trend, and represents a quickening of the rate of decline after prices fell 0.5% in the three months to the end of September."The weak economic background has been a key factor dampening housing demand this year. Recent encouraging developments relating to the level of overall economic activity and conditions in the labour market, however, may help to support demand and underpin house prices around current levels over the coming months," commented Martin Ellis, a housing economist at the Halifax.This was Barclays´s reaction to the data. "The decline suggested by the Halifax survey goes against the Nationwide survey for the same month, which reported house prices increasing by 0.6% month-on-month and by 0.5% in terms of quarterly rates of change. "We would point out that both of the above series are quite volatile from month to month. For this reason, the Bank of England's (BoE) Monetary Policy Committee looks at the average of both series´ 3 month/3 month growth rates as a less volatile measure to gauge the underlying trend in the housing market. This showed house prices fell by 0.3% on the quarter to the end of October and has been consistent with falling prices for over a year now. "We expect the squeeze on household earnings to ease in the medium term and for the BoE's Funding for Lending Scheme (FLS) to provide some support to prices (albeit modest). We forecast house prices to remain flat until the end of the year and to see a gradual recovery next year."