Fall in house prices cancels out January rise - Mortgages - News - Moneyfacts


Fall in house prices cancels out January rise

Fall in house prices cancels out January rise

Category: Mortgages

Updated: 04/03/2011
First Published: 04/03/2011

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

A fall in house prices last month has cancelled out the gains seen in January, with values also down on a quarterly and annual basis.

House prices fell by 0.9% in February, offsetting the 0.8% increase recorded in January, figures from Halifax show.

It means that the average price at the end of the month was £162,657.

The latest fall means that house prices in the three months to February were 0.4% lower than in the previous three months, showing a continuing slight decline in prices, although the fall remains far less serious than the quarterly dips of 5%-6% in 2008.

However, year-on-year prices have fallen by 2.8%, the biggest annual decline registered since October 2009.

Any large scale falls could be prevented by the drop in new properties coming onto the market.

The latest figures from the Royal Institution of Chartered Surveyors showed a reduction in new seller instructions for the fourth month in succession in January.

"Fewer properties have been coming onto the market in recent months," said Martin Ellis, housing economist.

"This trend, if sustained, should improve the balance between demand and supply and help to prevent a more significant fall in house prices."

House sales also remain low. The number of mortgages approved to finance house purchases – a leading indicator of completed house sales – increased by 7% between December and January on a seasonally adjusted basis, according to Bank of England industry-wide figures.

Despite this increase, approvals remain historically low with the total number in the three months to January being 4% lower than in the preceding three months.

"Overall, we expect a modest 2% decrease in house prices in 2011," said Mr Ellis.

"Uncertainty over the economic outlook is likely to weigh down on housing demand this year."

Find the best mortgage rate - Compare best selling mortgages

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Londoners could be saving for a century to buy

We all know how expensive property can be in London and how tricky it is to get on the ladder, but the figures could still come as a shock, with a study finding it could take more than a century for the typical Londoner to save a deposit.

85% of remortgagors benefit from lower rates

Mortgage rates are among the lowest ever recorded, and in the case of fixed rates, they just keep falling! This means it’s never been cheaper to fix your mortgage rate for the long term, and unsurprisingly, remortgagors are taking advantage.

Does your mortgage lender owe you money?

Earlier this week, the financial watchdog revealed that hundreds of thousands of mortgage holders could have been overcharged by their lender. Are you one of the many who could be in line for a windfall?