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House prices fall by 1.3% in 2011

House prices fall by 1.3% in 2011

Category: Mortgages

Updated: 06/01/2012
First Published: 06/01/2012

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House prices fell by 1.3% in 2011, although experts say that values 'held up well' in the face of challenging conditions.

Figures from Halifax show that the average price of a home in the UK dropped from £163,665 in December 2010 to £160,063 in December 2011 – a decline of 1.3%.

However, the annual rate improved markedly from the middle of 2011, with a yearly drop of 4.2% recorded in May 2011.

And Martin Ellis, housing economist says that the figures represent only a modest contraction given the state of the wider economy.

"House prices held up well last year in the face of the difficult and deteriorating economic climate and substantial pressure on households' finances," he commented.

"If the UK can avoid recession, we expect broad stability in house prices in 2012.

"There is, however, considerable uncertainty regarding the prospects for the UK economy which will, to a large extent, depend on how events in the Eurozone unfold."

Housing market conditions were little changed over the last 12 months, with the ratio of house sales compared to unsold properties remaining broadly unchanged since November 2010.

It is this stability in supply and demand which has helped underpin only modest movement in house prices over 2011.

Towards the end of the year there was a slight rise in the number of homes being sold.

Indeed, the number of sales in November 2011 was the highest since December 2009, at a seasonally adjusted 79,000.

But despite these recent signs of improvement, total sales in the first 11 months of 2011 were 2.5% lower than in the same period of 2010.

On a monthly basis, house prices fell by 0.9% in December, finishing a most unpredictable year; over the course of 2011 there were six monthly falls, five increases and one month where prices were unchanged.

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