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Prices fall 12% as sales plunge

House prices dropped by 1.3 per cent in September, making it the smallest monthly fall for seven months, according to the Halifax house price index.

It shows house prices in September were 12.4 per cent down year on year.

Halifax says the figures may indicate house price falls are starting to reach a plateau. The UK average price is now close to the level it was at in January 2006, £170,866.

Completed property sales in August were 47 per cent lower than in August 2007 and there were 32,000 mortgages app-roved in August, a 70 per cent annual fall.

Chief economist Martin Ellis says: “The overall price dec- rease in the three months to September was very similar to that in the previous quarter, indicating that the trend rate of decline may be beginning to stabilise.”

The average mortgage rate paid by new borrowers has risen by 22 basis points over the past year to 6.1 per cent from 5.88 per cent in August 2007. The rate for existing borrowers, however, has fallen slightly to 5.83 per cent from 5.91 per cent in August 2007.

However, Ellis adds a word of warning. He says: “The ongoing pressures on householders’ income, combined with the reduction in the availability of mortgage finance mean that market conditions will remain challenging.”

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