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House prices fall 2.3% in February, reveals Halifax

The average UK house price has fallen 2.3% to £160,327, according to the February Halifax House Price Index.

This is 17.7% less than in February 2008 (£194,953) and close to the level in August 2004 (£159,799).

Martin Ellis (pictured), housing economist at Halifax, says: “This monthly decrease more than offset January’s 2% increase. Prices in the three months to February compared to the previous quarter, which provides a better indicator of the underlying trend, were 3.6% lower.”

This compares with the quarterly rate of decline between June 2008 and January 2009 that was consistently around 5 to 6%.

Meanwhile, the house price to earnings ratio – a key measure of housing affordability – has fallen to its lowest for six years. It now stands at an estimated 4.42 in February, 24% lower than the peak of 5.84 recorded in July 2007, and 20.5% lower than last February.

Ellis adds: “Continuing pressures on incomes, rising unemployment and the negative impact of the dislocation of the financial markets on the availability of mortgage finance are, however, likely to mean that 2009 will be another difficult year for the housing market.”

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