House prices continue to fall

House prices continued their downward movement and fell 0.6 per cent in May, Halifax has said today.

15:54 07 June 2005

House prices continued their downward movement and fell 0.6 per cent in May, Halifax has said today.

The mortgage lender found that the average property is now worth 162,411 - just 5.7 per cent higher than the same month last year.

However, the wider picture presented by Halifax is one of stability and not crisis in the market.

"So far this year, prices are broadly unchanged with only a 0.1 per cent fall," said Tim Crawford, Halifax group economist.

"The annual rate of house price inflation was 5.7 per cent in May and has fallen from [the peak of] 22.1 per cent last July.

"It is now at the lowest rate since May 2001 and is likely to fall further over the coming months given the large monthly increases in the middle of 2004."

The Halifax data backs up a similar finding by Nationwide last week, which found that house prices are now 5.5 per cent higher than the same time last year.

And this fall in annual house price inflation is set to continue, Halifax said today, although a strong UK economy means that prices are very unlikely to crash.

"We continue to forecast a modest decline of two per cent in house prices this year across the UK. The market is underpinned by sound fundamentals including record employment levels, good affordability and rising real earnings," Mr Crawford added.