House prices dipped by 3.6 per cent in September, according to Halifax’s latest house price index.
Prices were also down 0.9 per cent in the third quarter compared to the second quarter.
On an annual basis, house prices increased by 2.6 per cent. This continues the recent downward trend for a high of 6.9 per cent in May and was below the 4.6 per cent increase in August. The average house price now stands at £162,096.
Typical mortgage payments for a new borrower have fallen from a peak of 48 per cent of average disposable earnings in mid 2007 to 30 per cent in the middle of 2010.
Halifax housing economist Martin Ellis says: “Looking at quarterly figures – a better measure of the underlying trend, house prices in the third quarter of 2010 were 0.9 per cent lower than in the second quarter of 2010. This rate of decline is significantly slower than the quarterly changes of between -5 per cent and -6 per cent that were seen in the second half of 2008. It is therefore far too early to conclude that September’s monthly 3.6 per cent fall is the beginning of a sustained period of declining house prices.
“A shortage of properties for sale contributed to an imbalance between supply and demand and was a key factor driving up house prices last year. An increase in the number of properties available for sale in recent months has reduced the imbalance. At the same time, renewed uncertainty about the economy and jobs has caused consumer confidence to falter recently, dampening the demand for home purchase. Together, these factors have been exerting some downward pressure on prices in recent months.”