house prices drop7 Oct 2010 11:44
House prices drop most on record, down 3.6% in a month
by Chris Marshall on Oct 07, 2010 at 08:39
House prices dropped 3.6% in September, the biggest monthly fall since the Halifax started its index in 1983.
According to the report, the value of the average house fell by some £6,000 to £162,096 in September.
The bank said it was too soon to conclude that September’s drop is the beginning of a sustained fall, with third quarter figures showing a milder 0.9% drop.
Martin Ellis, housing economist, said: ‘This rate of decline is significantly slower than the quarterly changes of between -5% and -6% that were seen in the second half of 2008. It is therefore far too early to conclude that September's monthly 3.6% fall is the beginning of a sustained period of declining house prices.’
The volatility in monthly prices can be seen in the Halifax’s index so far this year, which has shown four months of price rises and five of declines.
Like Halifax, Nationwide has also pointed to uncertainty ahead in the housing market, but its measure for September showed a 0.1% rise in prices.
Ellis said that while house prices had risen last year owing to an imbalance in supply and demand, the increasing supply of properties on the market this year had reduced that imbalance. ‘At the same time, renewed uncertainty about the economy and jobs has caused consumer confidence to falter recently, dampening the demand for home purchase,’ he said.
House prices though remain higher than they were a year ago, Halifax reports.
The Halifax data comes after the International Monetary Fund yesterday warned that the UK could face a double dip in house prices.
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