Halifax notes fall in house prices

According to the latest report from the Halifax bank, the UK housing market is slowing down again.

The banks' latest monthly survey suggests that the recent rise in house prices is showing signs of slowing, with figures showing that prices fell by 0.4% last month, after a 0.1% drop in April, putting the cost of the average UK house down to £167,570.

However, the figures differed from those of the Nationwide building society, which revealed on Thursday that prices had recently picked up.

The Halifax said that house prices had risen by 6.9% within the last year - faster than the 6.6% annual rate of growth it recorded in April.

But it explained that the recent acceleration in the annual rate came as a result of the rate falling at a faster last year.

The Halifax's housing economist, Martin Ellis, said: "The mixed pattern of monthly price rises and falls so far this year is consistent with a slowing market and is in line with our view that house prices will be flat during 2010 as a whole.

"The relative recovery in house prices in 2009 was driven by a boost to demand from reduced interest rates on mortgages combined with a lack of properties for sale.

"These factors have lost some momentum in recent months."

The report from Halifax shows that prices have now dropped in three of the past four months, at a time when sales have been in decline.

House sales in the first three months of 2010 were down 18% on the last quarter of 2009.

However, the Halifax said it was not clear whether this was a temporary decline or a sign of new downward trends to come.

It added that coming months may see an increase in homes coming onto the market, which could lead to an increase in sales.

"Estate agents have reported an increase in instructions from new vendors in 10 of the past 11 months," Mr Ellis said.

"The recent suspension of home information packs and uncertainty about changes to capital gains tax may also be persuading more homeowners to put their properties on the market," he added.