House prices down 4.3%

House prices fell 4.3 per cent in the last year, new data reveal.

The FT House Price Index for September show a 1.1 per cent fall in prices over the month – with all ten regions in England and Wales seeing prices falling.

The fall compares with an annual drop of 13.3 per cent recorded by Halifax yesterday.

The FT figures – traditionally more conservative than other indices based on final sales prices and not mortgage offers – puts the average house price at £219,307.

Falls of 5.6 per cent were recorded in Wales over the last three months, with the East Midlands and the north-west seeing property prices down 4.5 per cent and 4.4 per cent respectively.

An average 2.4 per cent fall was recorded for England and Wales for the last quarter.

Dr Peter Williams, chairman of Acadametrics, which compiles the index, said: "The average house price peaked in February of this year at £231,941, since when it has fallen by around 5.5 per cent i.e. by £12,634 to £219,307.

"This takes the average price back to where it was in March 2007, some 19 months ago."

He said the price falls should not cause problems for the vast majority of households, who do not wish to move home, but it did undermine everyone’s confidence.

“Mortgage supply continues to be a very serious problem affecting the ability of many people to buy and sell their properties," Dr Williams said.

"We see this in the sales transactions for the first half of 2008, which were down 41 per cent across England and Wales, compared with the first half of 2007."

He also predicted the price slump to continue for some time.

"Looking ahead, with gross mortgage lending in 2008 expected to be about 30 per cent down at around £260 billion - compared to £364 billion in 2007 - and with lenders suggesting, in the Bank of England Credit Conditions survey, that there will be a continued increase in arrears and possessions, there is every likelihood that prices will continue to fall for the foreseeable future."