UK Property Prices Down 2.6% - Halifax, January Rise a Blip

Patrick Collins, the Guardian money editor was right on the money when he said the January price rise reported by the Halifax was just a blip and should not be viewed with too much optimism. I pointed out the possibility that he might be being a little overly pessimistic, because of other indicators that were positive at the time. I have since said that the UK market will bottom in late 2009, and prices will grow 5-7% in 2010.

The UK's biggest lender has now reported a 2.3% fall in UK house prices for February, all but proving the January rise was an anomaly, a blip in the downward trend that had then continued for ten months previous to that.

The Halifax index now puts the average price of a UK house at: £160,327, a year on year drop or 17.7% since February last year.

Nationwide only put in a 1.8% drop for February, but their year-on-year figures tally up; Nationwide put the year on year drop at 17.6%.

The average UK house price is now just 4.4 times the average UK wage, but unless the banks start making finance more readily available very few people will be able to take advantage of this, according to Halifax's housing economist, Martin Ellis.

Ellis said that there were "tentative signs" that demand for homes had started to stabilise after months of falls, with some buyers tempted back into the market as a result of falling prices, adding that: "the house prices-to-earnings ratio had fallen to its lowest level for six years with properties now costing an average of 4.4 times salary, down from a peak of 5.8 in July 2007," but, he said: "until mortgage lenders begin to offer funding, many would-be buyers will be unable to take advantage of lower prices."