New figures from Halifax reveal that house prices are continuing to fall…

According to its latest monthly survey, prices across the UK fell by 0.3% in February, taking the annual rate of inflation down from 4.5% to 4.2%.  This means the average UK home now costs £196,649, according to the lender's calculations.

Martin Ellis, the Halifax's chief economist, commented: “Prices will remain flat over the coming year if the economy and employment continued to grow”.

He added: “Whilst the housing market has slowed over the past six months, it is supported by sound economic fundamentals. Interest rate cuts by the Bank of England are also helping to underpin house prices”.

Halifax’s figures are broadly in line with Nationwide’s latest index, which also revealed another drop in house prices. However, there was a huge difference in average house price figures between the two lenders.

Prices clearly weakening

Fionnuala Earley, Nationwide's Chief Economist, said: “The price of a typical house fell by 0.5% during February, bringing the annual rate of house price growth down to 2.7%. This is the fourth consecutive monthly fall in house prices and brings the annual rate of house price inflation to its lowest since November 2005.

“The trend in prices is clearly weakening, but the size of the drop in the annual rate between January and February perhaps overstates the rate of cooling as it partly reflects the particularly strong increase in prices in February last year.

“The 3-month on 3-month rate of price growth rate fell to -1% in February, down from -0.4% the previous month. The average price of a typical property now stands at £179,358, an increase of £4,653, or £12.75 per day, over the last 12 months.“