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Average house price drops 4.2% year on year

Tuesday, 7 June 2011 2:21 PM

Average house prices in the UK dropped 4.2 per cent year-on-year in the three months to May, figures released today suggest.

The average UK house price in May was £160,519, 1.4 per cent lower than in December 2010 on a seasonally adjusted basis, according to the Halifax Price Index. Looking at the three-month periods in their entirety, house prices in the three months from March to May were 1.2 per cent lower than in the preceding three months, the index suggested.

The report says that house prices have been consistently declining over the past 12 months.

Martin Ellis, housing economist, said: "Low earnings growth, higher taxes and relatively high inflation are all putting pressure on household finances.

“Confidence is also weak as a result of uncertainty about the economic and employment outlook. These factors are probably constraining housing demand and applying some downward pressure on prices.

"Overall, we expect a moderate improvement in the economy during the remainder of 2011, which, combined with continuing low interest rates, is likely to support housing demand.

“This should prevent a further marked fall in prices and help to stabilise property values later in the year."

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