House prices fall in February

Date: Thursday 04 Mar 2010

The freezing start to 2010 and higher stamp duty stopped the housing market revival in its tracks in February, with prices falling for the first time in eight months according to the latest figures from mortgage lender Halifax.

House prices fell by 1.5% in February breaking a run of seven consecutive monthly increases. The average house price in the UK is now £166,587, still more than 4.5% higher than a year ago.

An increase in the number of properties coming onto the market has also dampened prices, the bank said.

"An increase in the number of properties available for sale has helped to reduce slightly the imbalance between supply and demand," said Martin Ellis, Halifax's housing economist.

This combined with cold weather at the start of the year and the end of the stamp duty holiday on properties prices between £125,000 and £175,000, he added.

Last week, building society Nationwide said prices dropped by 1% in February.

Howard Archer, of IHS Global Insight, said the latest surveys reinforced his view that the housing market is set for a flat 2010.

“The fall in house prices in February reported both by the Halifax and the Nationwide is supportive to our long-held view that house prices will be prone to corrections in 2010 and will probably be no better than flat over the year.

“Although the Bank of England may well hold off from raising interest rates until 2011, the overall economic environment is still far from supportive for house prices while credit conditions remain pretty tight,” he said.

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