House prices fall but lack of real direction continues

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House prices continued to “fluctuate quite widely” last month, mortgage lender Halifax said yesterday, as the average price dropped 2.4 per cent.

The decrease in the average house price, to £159,883, follows an increase of 2.2 per cent in March and leaves the three-month measure 0.3 per cent higher, Halifax said.

Martin Ellis, housing economist at Halifax, said: “Despite the slight improvement in the underlying trend in recent months, house prices continue to lack real direction, with the current UK average price little different to where it was at the end of 2011.”

The rise in the three-month indicator was the first increase on this measure since September, following six successive falls, Halifax said.

But prices in the three months to April were 0.5 per cent lower than in the same period a year earlier. The UK average price in April 2012, at £159,883, was almost equal to the £159,888 in December.

The ending of the stamp duty holiday for first-time buyers in late March appears to have boosted home sales early this year as buyers strove to beat the deadline, and has probably contributed to the volatility in house prices, Halifax added.

Howard Archer, chief UK and European economist at IHS Global Insight, expects house prices to fall by a further 3 per cent by the end of 2012.

He said: “Housing market activity is very low compared to long-term norms.

“And the economic fundamentals currently look worrying overall for the housing market with unemployment high and likely to rise further, earnings growth muted, and the outlook uncertain.”