On an annual basis, the latest Halifax House Price Index shows prices in December were 1.6% lower as measured by the average for the latest three months against the same period a year earlier.
Prices in December alone were 3.4% lower than in December 2009.
Nationally, Halifax expect limited movement in house prices during 2011 but with the risks on the downside. Some modest variations in house price performance across the country, however, are likely. The regional picture is likely to be affected by the impact of public spending reductions.
Martin Ellis, Halifax housing economist, said:
"Prices in the final three months of 2010 were 0.9% lower than in the previous quarter. This rate of decline is significantly less than the quarterly falls of 5-6% during the second half of 2008. House prices fell by 1.3% between November and December.
"Looking forward, we expect limited movement in house prices during 2011 but with the risks on the downside. Interest rates are likely to remain very low for some time. This will continue to support a favourable affordability position for those entering the market and limit financial pressure on existing homeowners to sell. Current signs that homeowners are becoming more reluctant to sell would, if continued, help reverse the imbalance between buyers and sellers. Nonetheless, uncertainty about the economy, weak earnings growth and higher taxes could put some downward pressure on demand."
Stuart Law, Chief Executive of Assetz said:
“The latest figures from Halifax, which show a 1.3% fall in house prices, contrast with the 0.4% increase recorded by Nationwide in the same month, pointing to the volatility of house price data, as well as the danger of reading too much into a single lender’s monthly data, at times of market stagnation and so few transactions.
“While there will be downward pressure on house prices in 2011, as a result of the Spending Review cuts and cautious mortgage lending, we expect to see the huge housing shortage and improvements in mortgage terms to continue to underpin prices this year.”
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