Halifax: House prices dropped in February by 0.3%
Halifax has reported a drop in house prices
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Thursday, 06, Mar 2008 12:20
House prices in the UK fell 0.3 per cent in February according to the latest figures from Halifax.
Halifax's house price index showed house prices were 4.2 per cent higher than a year earlier, however. The average price of a home in the UK has increased by £4,390 – or almost £12 a day - over the past year to £196,649.
The bank, which is part of the HBOS group, predicted flat house prices over 2008 as a whole.
Martin Ellis, Halifax's chief economist, said: "Whilst the housing market has slowed over the past six months, it is supported by sound economic fundamentals.
"Interest rate cuts by the Bank of England are also helping to underpin house prices. Nationally, we predict that house prices will be flat in 2008."
Halifax also predicted the Bank of England to follow up the two interest rates cuts since December with further reductions during the remainder of the year.
Commenting on the report, Royal Institution of Chartered Surveyors' chief economist Simon Rubinsohn said: "The drop in the Halifax house price index in February provides further evidence of the pressure on the residential property market at the present time.
"We see little reason for this pattern to be reversed in the near term. Indeed, survey evidence suggesting that companies may be starting to cut back on recruitment could exacerbate the weakness in property prices over the coming months."
The Bank of England held interest rates at 5.25 per cent today, despite calls from some in the housing industry to cut rates to support the market.