Thu, 05 Mar 09
House prices fell by 2.3% in February and have slumped by 17.8% over the last 12 months, according to latest figures from HBOS.
According to the lender, which is the UK’s largest and is now part of the Lloyds Banking Group, the price of the average home is now worth £160,327.
The lender has said that further price drops are expected over the year with this latest monthly drop more typical of the current downward trend. Last month’s reported rise of 2% between January this year and December last year is unlikely to be repeated.
HBOS’s housing economist Martin Ellis said: "Continuing pressures on incomes, rising unemployment and the negative impact of the dislocation of the financial markets on the availability of mortgage finance are, however, likely to mean that 2009 will be another difficult year for the housing market."
He added that the house price to earnings ratio was at its lowest level for six years, offering some hope that buyers may soon be tempted back into the market and stabilise prices. However, the 'Catch 22' for the uk housing market is that potential buyers are more likely to enter the market when house prices appear to have 'bottomed out' and judging by the current rate of decline that may be some considerable time in the future.
UK house prices have now fallen 19.7% (ca. £40,000) since their peak in August 07, according to the Halifax House Price Index.
By Joe LepperSee also - Mortgages, House Price Indices Asking Price Index, House Prices and Trends
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