House prices fall for third consecutive month
House prices fell for the third consecutive month in November, dropping by 1.1%, according to latest figures from the UK’s biggest mortgage lender.
Halifax said it was the first time prices had fallen for three consecutive months since early 1995, while it was the biggest monthly drop recorded since December last year.
The average house cost £194,895 in November compared with £197,248 in October.
Martin Ellis, Halifax chief economist, said: “The housing market has slowed in recent months as the increase in interest rates between July 2006 and July 2007 has taken effect. Higher mortgage repayments and falling real earnings have put pressure on households’ income, resulting in a slowdown in both house price growth and activity.”
But he added: “The UK economy is in sound shape. Strong market fundamentals, a structural housing supply shortage and pent-up demand from a large number of potential first-time buyers will support house prices, preventing a sustained and significant fall.
The figures, come as the Bank of England’s Monetary Policy Committee begins its two day meeting, raising pressure for an interest rate cut tomorrow.
But the MPC is still expected to keep interest rates on hold at 5.75 per cent due to worries about inflationary pressures.