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House prices down 2.4% year-on-year

House prices down 2.4% year-on-year

Category: Mortgages

Updated: 04/02/2011
First Published: 04/02/2011

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 It is now over 6 months old so the content may be out of date.

House prices have fallen by 2.4% in the last 12 months, shaving more than £4,000 off the average price of a property.

Despite a 0.8% rise from December to January, the average price of a home in the UK finished last month at £164,173, down from £168,390 at the same point 12 months previously.

In addition, figures from Halifax show that house prices in the three months to January were 0.7% lower than in the preceding three months.

This continues a trend of falling prices quarter-on-quarter, although recent figures are markedly lower than during the second half of 2008, when quarterly declines of 5-6% were recorded.

Figures show there was a slight rise in housing activity last year, with the number of house sales in the UK increasing from 846,000 to 884,000, although activity remains historically low.

"We expect limited movement in house prices overall this year. There are, however, likely to be some monthly fluctuations with the risks on the downside," said Martin Ellis, housing economist.

"The prospects for the market in 2011 are closely aligned with the performance of the wider economy. Consumer confidence has fallen recently, partly as a result of nervousness about the economic outlook."

The latest figures from the Royal Institution of Chartered Surveyors reported a fall in the number of people putting their homes up for sale, a possible symptom of falling prices, according to Mr Ellis.

"On a positive note, there have been further signs that the recent downward trend in prices is causing homeowners to be more reluctant to put their properties on the market," he added.

"This development should help to relieve downward pressures on prices as long as it is sustained. We also expect interest rates to remain very low for some time, supporting a favourable affordability position for many existing mortgage borrowers and those entering the market."

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