10 Oct

House price falls 'slowing'

House price falls 'slowing'

New house price figures may suggest that the property slowdown is losing momentum.

Halifax data for September showed that during the month the average UK house value dropped by 1.3 per cent to £172,108.

This represented the smallest decrease in seven months.

In addition to this, Halifax revealed that there are some positive trends emerging to indicate an improvement in affordability.

The ratio of house prices to earnings fell from 5.84 in July 2007 to 5.02 in July 2008, the new figure being the lowest difference since February 2004 when it was 5.01.

At the same time, the average mortgage rate being paid on all outstanding loans fell from 5.91 per cent in August 2007 to 5.83 per cent in the same month this year.

The lowering of mortgage rates following the base rate cut this week may enhance affordability further.

Additional reductions in the base rate could bring it down to 3.5 per cent by mid-2009, the Royal Institution of Chartered Surveyors has predicted.

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