Savers unhappy with low returns are turning to the property market, despite data from Halifax confirming that prices fell again in February and are now an average of 17.17% lower than a year ago.
Halifax reported a 2.3% price decline last month, reversing a 2% increase in January. Martin Ellis, Halifax’s chief economist, said that rising unemployment and the effect of 'financial market dislocation' on mortgage availability meant a difficult year ahead.
At the same time, Halifax sees tentative signs that housing market activity is stabilising, although from very low levels.
The rekindling of interest in property — either to live in, to let, or for adult children — is being spurred by fast-declining returns from savings accounts. These are set to shrink again after yesterday’s base rate reduction to an historic low of 0.5%.