Fears of a cooling UK housing market are mounting after the release of a Halifax report, which stated that Britain’s house prices have fallen 1.2% in the last 3 months.
Halifax, a mortgage lender, painted a muddled picture of the British housing market. While the average price of homes fell by a staggering 3.7% in September, October saw them rise by 1.8%, to £164,919.
In sum, prices were down by 1.2% in the three months leading up to October. Halifax says that this measure provides a more accurate indication of underlying trends in housing prices. Monthly changes, they said, can be more erratic.
Halifax housing economist Martin Ellis explained: “An increase in the number of properties available for sale in recent months, together with a decline in demand, has put some downward pressure on prices in recent months.”
Mr. Ellis went on to say that the company expects interest rates to remain relatively low for an extended period of time, which should facilitate the improving mortgage affordability for homeowners. “Low rates and stable employment levels are benefiting homeowners.”
HIS Global Insight’s Howard Archer says that the 1.8% recovery of housing prices does not significantly change the view that prices are likely to “soften” by the end of 2011. He did add, however, that “there may well be significant volatility around an overall gradually declining trend”.