House prices set to fall

UK house prices fell 0.4 per cent in November, and are predicted to fall two per cent next year, Halifax has said today.

10:04 03 December 2004

UK house prices fell 0.4 per cent in November, and are predicted to fall two per cent next year, Halifax has said today.

Since July the average house price has fallen 0.9 per cent, to 159,947, however this is still 16.8 per cent higher than prices at the same time last year.

"The housing market continues to slow with an easing in the annual rate of house price inflation from a peak of 22.1 per cent in July to 16.8 per cent in November," said Martin Ellis, Halifax chief economist.

But the small drop in house prices in November was seen by the bank as further evidence that the property market will not crash.

"Last month's modest fall was smaller than the declines in August and October, suggesting that a measured slowdown may be underway," said Mr Ellis.

"The fundamentals underpinning the housing market remain sound. In particular, the ongoing strength of the labour market, reflected in rising employment levels, will continue to support housing demand," he added.