Halifax expects 2 pct house price fall in 2011 - Property market

Halifax expects 2 pct house price fall in 2011 - Property market: House prices in the UK fell by an annual 2.8% in February, the fastest rate of decline in 16 months, the Halifax said today. Halifax's house price index showed continuing volatility month-on-month, as a fall of 0.9% during February itself more than wiped out January's 0.8% rise.

The index has recorded five increases and seven falls during the past 12 months, and now records the average house price as £162,657.

Halifax said the property market remains under pressure due to a lack of demand, as people delay moving home in the face of the uncertain economic outlook.

Key services sector data yesterday clouded the picture on the UK economy as it suggested activity was failing to bounce back from a winter dip.

While this made it unlikely that the Bank of England will hike rates before the summer, problems in the mortgage market mean those who do want to press ahead with a purchase are struggling to raise the money they need.

The index's 2.8% decline compares the three months ending in February with the same period a year earlier, and contrasts with Nationwide data earlier this week, which showed house prices broadly unchanged from a year earlier.

Meanwhile, the Halifax index for the three months to February showed a 0.4% decline on the preceding three months.

Martin Ellis, the Halifax housing economist, said he expects 'a modest 2% decrease in house prices in 2011' as fewer homes are put up for sale. 'Fewer properties have been coming on to the market in recent months,' he said.

'This trend, if sustained, should improve the balance between demand and supply and help to prevent a more significant fall in house prices.'
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