4 Sep

House price dip may have affordability benefits

House price dip may have affordability benefits

Halifax has recorded a further fall in house prices during August, something that may benefit first-time buyers looking for an affordable home.

Figures from the bank for August have shown that the average UK house price dropped during the month by 1.8 per cent, to £174,178.

A key affordability finding of the survey was that the ratio of house price to income has fallen from 5.84 in July 2007 to 5.13 in June 2008.

The bank's chief economist Martin Ellis suggested that many factors may prevent the figure falling much further.

"A solid labour market, low interest rates and a shortage of new houses continue to support the market," he said.

Those hoping for an interest rate cut today were left to wait again by the Bank of England's monetary policy committee as it held the base rate for the fifth successive month.

However, CBI chief economic advisor Ian McCafferty predicted that a rate cut may be increasingly on the cards in the coming months as inflationary pressures fade.

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