0.3% descent in house prices

House prices fell by 0.3 per cent in February, according to the latest information from mortgage lender Halifax.

In the last year the average price of a home increased by 4.2 per cent and now stands at £196,649, the Halifax's house price index for February shows.

But the evidence of plunging prices over the last month comes after January showed no monthly price changes and an annual house price inflation of 4.2 per cent.

Economists at the mortgage lender have now forecast house prices will remain flat throughout 2008.

These figures reflect a trend being seen in the housing market this year. Earlier this month Nationwide reported house prices had gone down by 0.5 per cent in February and annual inflation had dropped to 2.7 per cent.

Howard Archer, UK economist for Global Insight, said: "Overall the data suggests house price are continuing to cool markedly, but they are not plunging through the floor.

"Nevertheless, the housing market clearly remains under substantial pressure elevated affordability constraints and tighter lending practices."

And a spokesperson from Capital Economics said the fall recorded by Halifax in house prices showed any positive impact the housing market might have had from interest rate cuts in December and February were outweighed by fears of economic slowdown and problems in the mortgage market.


Halifax also renewed concerns about stamp duty. Their figures reveal residential revenue from the tax has more than doubled over the past five years from £2.7 billion in 2001 to 2002 up to £6.4 billion in 2006 and 2007.