House prices down, mortgage approvals up
Average UK property prices fell by 0.7% in October, according to the latest Halifax House Price Index.
The lender said that prices last month were 1.7% lower than the same period in 2011, with the average house price in the UK now £158,426.
Mortgage approvals continued to rise, with figures growing for a third successive month. Approvals in September rose 4% month-on-month to 50,000.
Martin Ellis, housing economist at Halifax, commented:
“Signs of a modest deterioration in the trend in house prices continued in October. Prices in the three months to October were 1.2% lower than in the preceding three months.
“The weak economic background has been a key factor dampening housing demand this year. Recent encouraging developments relating to the level of overall economic activity and conditions in the labour market, however, may help to support demand and underpin house prices around current levels over the coming months.”
Jonathan Samuels, CEO, Dragonfly Property Finance, said:
“The property market remains on the back foot in what is a wholly underwhelming economic climate.
“I expect there to be a sizeable lag between the economy picking up and consumer confidence returning.
“Even if the economy continues to improve and confidence grows, the question then is whether the banks will lend in any material way to higher LTV borrowers?
“Until there is greater movement at the bottom end of the property ladder, the property market will remain in a state of limbo.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, added: “On the mortgage front, there is good news with increased loan availability, better rates as a result of Funding for Lending and increased confidence as we emerge from the double-dip recession.
“The rise of mortgage approvals continues at a modest pace but in the right direction.
“We must surely be close to reaching saturation point on fantastic mortgage deals for those with large deposits – we need more choice for those with more modest down payments if Funding for Lending is to make a real difference to the housing market.”