Halifax calls on market to stay calm despite house price slump
House prices slumped 0.9% in April to £189,027, compared with £196,262 in the same period last year, Halifax’s House Price Index reveals.
The annual change data in Halifax’s HPI, which was published earlier this month, is seasonally adjusted and based on quarterly year-on-year figures.
The lender attributes the recent decline on reduced household budgets and the rapid house price growth of recent years. It also cites increase mortgage costs, due to the rise in interest rates between August 2006 and July 2007, as a contributing factor.
But Halifax is urging the market to consider the decline in the context of previous years’ highs - it claims prices nearly doubled over the 10 years to August 2007, rising by more than £130,000 during the period. The lender forecasts a mid-single digit percentage decline in UK house prices this year, though it predicts regional variations, with Scotland expected to experience price rises while Wales and the West Midlands are likely to suffer higher than average falls. Meanwhile, Nationwide’s House Price Index shows that average house prices declined in April by 1.0%, year-on-year, with average prices at £178,555, down from £180,314 in 2007.
Fionnuala Earley. Nationwide’s chief economist, says: “April’s falls in prices continues the trend of the last six months and ref lects the weakening sentiment in the market brought about by poor affordability and tighter financial