House Prices Are Falling Says Halifax

The Halifax House Price Index is showing that house prices fell by almost 1 percent between July and September.

There was a 0.9% fall in the value of houses during the last quarter, according to the Halifax. September saw a 3.6% reduction in house prices, however the value of residential property is still 2.6% higher than it was twelve months ago.

Although the quarterly fall of 0.9% does point to a weakening of the housing market, this rate of decline is significantly slower than the quarterly falls of between 5 and 6 % seen in the second half of 2008, says Martin Ellis, Halifax housing economist.

“It is therefore far too early to conclude that September’s monthly 3.6% fall is the beginning of a sustained period of declining house prices.”, he concludes.

Lingering concerns about the about the economy and job prospects is undermining consumer confidence. In addition, earnings growth is expected to be modest over the next year, VAT and tax rises are on the way and more people are putting their homes on the market.

“These [factors] will all be constraints on the market, dampening house prices. On the positive side, we expect interest rates to remain very low for some time, which will underpin the improved affordability position for homeowners.”, advises Mr Ellis.

One aspect of the property that is experiencing growth at the moment is the rental market where demand from tenants is at an eight year high.

It seems that the prospects of renting rather than buying are more attractive and attainable during these times of financial uncertainty.