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House prices slump again in November

House prices slump again in November

Category: Mortgages

Updated: 09/12/2010
First Published: 09/12/2010

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 It is now over 6 months old so the content may be out of date.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 slumped further in November, confirming something of a bleak mid-winter for the property market.

House prices are currently down on the same point a month ago, three months ago and a year ago, according to Halifax. The average price of a home in the UK finished November at £164,708.

Values fell by 0.1% last month compared with October, meaning that prices have fallen by 2.1% over the last quarter period – a figure that has picked up in recent months.

This remains well below the quarterly declines of 5% to 6% that were evident during the peak of the housing market collapse during the second half of 2008, and the current evidence suggests a relatively flat underlying trend for house prices. Prices are down by 0.7% on the same point a year ago.

It is the first time a yearly fall has been registered since November 2009 and continues the recent downward trend from a high of 6.9% in May earlier this year.

House prices remain well above the trough seen in April 2009, with current average values more than £10,000 up on that time.

"Higher numbers of properties for sale, combined with reduced demand, have caused the recent decrease in prices," said Marin Ellis, housing economist.

"There are, however, some tentative signs that homeowners are becoming more reluctant to put their properties on the market which, if continued, will help to relieve the current downward pressure on prices.

"Interest rates are likely to remain very low for an extended period, which will support the improved mortgage affordability position for homeowners. As a result, we do not expect to see a significant fall in house prices."

Figures show that the low interest rate environment has reduced the burden of servicing mortgage debt.

Typical mortgage payments for a new borrower have fallen from a peak of 48% of averagedisposable earnings in mid 2007 to 29% in the third quarter of 2010.

This key measure of affordability isat a better level than the long-term average over the past 25 years (37%) and is an important factor supporting housing demand.

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