Halifax House Price Drop

A report by the Halifax agrees with the report from Nationwide earlier in the weekin showing that house prices have dropped in the previous 12 months.

It is the first time in over 12 years that a drop in house prices over a year has been reported by the Halifax, with an average 0.9% drop since last April, taking the average house price to £189,027. The last time they reported an annual house price drop was February 1996.

Halifax chief economist Martin Ellis said: 'We are expecting a modest decline in house prices in 2008, and there is a strong chance that will continue into 2009. House prices are high in relation to earnings so there is a problem for people entering the market, and there is a general squeeze on spending as well.'

This news piles on more pressure to the Bank of England to cut interest rates, although many lenders have still to pass on rate cuts since last month's rate cut, with some lenders actually increasing rates since the cut.