House prices are now lower on average than they were a year ago, Halifax, the UK’s biggest mortgage lender, said yesterday in a report that invited parallels with the 1990s housing slump and fuelled hopes of a cut in interest rates this week. Financial Times, Daily Telegraph
Halifax said house prices fell 2.5% in March, taking the quarterly drop in prices to 1 per cent and the quarterly year-on-year growth rate to 1.1% – the lowest in 12 years.
Although the Halifax index is often volatile from month to month, it is now giving the same picture of annual house-price growth as rival lender Nationwide.
But the lender said the average house price last month was £191,556, compared with £194,094 in March 2007 – the first year-on-year fall since the start of 1996.
The swings in monthly data mean that is a less reliable measure than the smoothed, quarterly year-on-year figures, but unless there is a big rebound in April, the index looks set to remain lower than a year earlier.
Housebuilders Persimmon, Bovis and Redrow, which had already seen their share prices fall 50pc in the past 12 months, dropped again after the UK’s biggest mortgage lender revealed a 2.5% fall in its housing index for March. Economists had expected a drop of nearer 0.5%.