House prices dipping slightly, says Halifax

Mortgages and Home

Updated on 06 December 2011 | 1 Comment

The bank's latest monthly house price index finds prices dropping in November.

Halifax’s latest monthly house price index shows property prices falling both monthly and annually.

Prices in November fell by 0.9% compared to October and were down 1% on November 2010. The monthly dip reversed a surprise 1.2% rise in October. And October’s rise sandwiched two months of falls, with the past three months showing a 0.6% drop overall.

Looking at the figures across the 11 months of 2011 so far, Halifax has recorded five months of rises, five months of falls and one month of no change. All of which points to a fairly stagnant market, which has been borne out by some of the other house price reports.

Halifax says the average UK house price, according to its figures, is now £161,731. This is 0.7% lower than in December 2010.

Interestingly, Halifax has pointed to an increase in mortgage activity as a sign of a potential pick-up in lending and, therefore, the property market. But recent Council of Mortgage Lenders figures say much of this activity is buy-to-let remortgages.

Hedging his bets, Halifax’s Housing Economist Martin Ellis said: “We expect the market to remain broadly unchanged in terms of both prices and sales over the coming few months as demand and supply conditions alter little."

With the Christmas slowdown now here, he should be proved right in terms of December's figures. But the ongoing debt crisis in the Eurozone could play a part in how the property market starts the new year. Mortgage lending may well get even tighter, with interest rates rising, if the situation deteriorates further, potentially leading to fewer buyers and sellers having to drop asking prices.

More: Why UK house prices have yet to crash |  Contradictory news on house prices

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