Halifax today joined the growing band of housing market experts predicting that house prices will fall during 2005.

The lender said it predicted that house prices in the UK will fall by 2% in 2005 after nine years of rising house prices when the average home has increased in value by almost £100,000, a 160% increase. Beyond 2005, Halifax expects the market to record modest price increases; affordability will also improve, especially for first-time buyers, who will return to the market in larger numbers than in recent years.

Last month Barclays said it expected house prices to fall 8% in 2005 and analysts at Goldman Sachs suggested prices would dip between 10 and 15% over the next 18 months. Last week Rightmove suggested the next few months would be painful with commercial director Miles Shipside saying, "It may be ugly for a month or two, but a bit of turbulence is inevitable on the approach to the much hoped for soft landing."

Halifax also released it's monthly data today saying house prices fell in November by 0.4% bringing the annual rate of inflation down to 16.8%.

Commenting, Martin Ellis, Chief Economist, said: "The housing market continues to slow with an easing in the annual rate of house price inflation from a peak of 22.1% in July to 16.8% in November."

"Overall, house prices have fallen by 0.9% since July and by 0.4% over the past quarter. Last month's modest fall was smaller than the declines in August and October, suggesting that a measured slowdown may be underway."

"The slowdown in house price growth and activity during the past few months shows that the Bank of England's interest rate rises are successfully curbing housing demand."

"The fundamentals underpinning the housing market remain sound. In particular, the ongoing strength of the labour market, reflected in rising employment levels, will continue to support housing demand."

Other housing market indicators continue to show a moderation in activity since mid-year, said the lender. For example, the number of loans approved for house purchase fell for the fifth successive month in October, to a seasonally adjusted 83,000 (source: Bank of England). Accordingly, activity has fallen from the very high levels during the period from early 2002 to mid-2004 to levels that are similar to the late 1990s.

The latest RICS survey shows a 10% rise in the stock of unsold properties on estate agents' books between July and October, but the stock is only slightly higher than a year ago. New buyer enquiries fell for the sixth successive month, but there are signs of an easing in the downward trend with the decline in October being the smallest since the downturn began in May.