The economic analysts said the UK housing market was still struggling for direction as mortgage approvals for house purchase had barely changed and the latest house price indices exhibited very little movement.
In the Bank of England’s latest Credit Conditions survey, lenders reported a dramatic fall in mortgage demand in the fourth quarter of 2011.
The net balance of lenders reporting a rise in demand from all borrowers fell from 15% in the third quarter to -21% in the fourth quarter.
Nationwide’s house price index reported a monthly house price fall of 0.2% in December.
And the Halifax house price index reported a 0.9% fall in house prices in December compared to November.
The latest Land Registry figures reported that house prices inched up by 0.3% in November from October.
Capital Economics said: “The housing market continues to look fragile. Against the backdrop rising unemployment and a new recession, we do not expect activity levels to improve next year. As a result, we think further house price falls are more likely than not.”
