UK house prices still falling, lender says

By Robert Barr | April 4, 2009, Saturday |

Print Edition

HOUSE prices in Britain fell 1.9 percent in March compared to February, the country's biggest mortgage lender said yesterday, dampening optimism over a separate report earlier that said property values had edged higher.

The report from the Halifax, a division of Lloyds Banking Group, came only a day after another major mortgage lender, Nationwide Building Society, said average prices rose 0.9 percent in March.

Although reporting a price drop and predicting that 2009 will be a tough year in the housing market, Halifax nonetheless detected some hopeful signs.

"The latest industry-wide figures show that the number of mortgages approved to finance house purchase in February were the highest since May 2008," said Halifax economist Martin Ellis.

"The house price to earnings ratio - a key measure of housing affordability - is at its lowest level since early 2003 at 4.34. The recent cuts in interest rates have also reduced the amount the average existing mortgage borrower is devoting to mortgage repayments from a peak of 26.9 percent of household income in October 2008 to 22.6 percent in February 2009."

Nationwide's chief economist Fionnuala Earley had cautioned that her bank's report of a rise in March was "far too soon to see this as evidence that the trough of the market has been reached."

Real Estate

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UK house prices still falling, lender says

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