House Price Update 12 October 2011

UK House Prices Situation: Prices slipping in many areas

UK House Prices Forecast: House prices will get weaker in most areas

Prices Down -0.5% in September – Halifax

House prices fell by 0.5% in September, according to the latest Halifax House Price Index. That fall means that house prices have fallen by an average of 2.3% over the last 12 months.

Looking at the quarterly rate of change, house prices from July-September were 0.1% higher than April-June – a rise so small as to be insignificant.

Martin Ellis, Halifax's housing economist, describes the current market situation as being "consistent with a market where prices are lacking genuine direction."

Ellis commented that "low interest rates and a rise in employment over the last year" have supported the market, despite "greater uncertainty about economic and personal financial circumstances."

However, there was good news on affordability. Mortgage payments for new borrowers have fallen to a new low of 26% of average disposable earnings, the lowest level since 1997.

RICS Figures Highlight London Divide

The latest house price survey published by the Royal Institution of Chartered Surveyors (RICS) shows that average house prices are falling in every region of the UK, except London.

RICS says that activity remains "subdued" and that the headline net price balance remained unchanged at -23 – meaning that 23% more surveyors reported falling prices than rising prices. Despite this, three quarters of the surveyors reporting falling prices said that the falls were in the range 0%-2% - fairly small.

The largest price falls were reported in the East and West Midlands, with London surveyors reporting a net price balance of +25, meaning that 25% more surveyors reported rising prices than falling prices in London.

Read about UK House Price indexes / key statistics that track the ups and downs of house prices

Read our take on the Credit Crisis the effect on UK House Prices and Mortgages. A Special Report

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