House prices in the three months to April were 1.2% lower than in the previous three months. This continues the modest decline in prices recorded since the middle of last year. The current house price is 4% above its April 2009 low but remains 20% below its August 2007 peak.
Prices in April were 3.7% lower than a year ago as measured by the average for the three months to March against the same period a year earlier and marks the biggest annual decline since October 2009 (4.7%).
Martin Ellis, housing economist at Halifax, said: "Weak confidence amongst households, partly due to uncertainty over the economic outlook, is constraining housing demand and resulting in some downward movement in prices.
“Signs of a modest tightening in housing market conditions, a relatively low burden of servicing mortgage debt and an increase in the number of people in employment are all likely to be providing support for house prices, curbing the pace of decline. There are signs that house sales are stabilising albeit at a level lower than the historical average."
Paul Hunt, managing director of Phoebus Software, said: “Dropping prices will give more weight to the argument to keep the Bank rate low and it now seems likely that we won’t see a rise until later this year.
“That’s great news for those repaying mortgages and for people looking to remortgage as the price of fixed rate deals has started to decline too. This will reduce the pressure on homeowners with tight finances to sell and is an indication that transactions remain subdued.”
And Nick Hopkinson, director of PPR Estates, added: “This latest data from one of the biggest mortgage lenders confirms once again just how little buyer confidence there currently is in future house prices.
“Anyone needing to sell their property in 2011 will have to accept the reality that prices are on the way down now. Competent selling agents will be advising clients to cut selling prices fast if they really need to sell.”
The Royal Institute of Chartered Surveyors said the ratio of house sales to the stock of unsold properties on surveyors’ books increased slightly in March for the second consecutive month, suggesting a modest tightening in market conditions.
The ratio remains higher than the levels recorded during the second half of 2008 and early 2009 when house prices fell sharply. A lower level of properties available for sale largely explains why current market conditions are tighter than in this period.
