House prices slump in March
House prices fell by 2.5% in March, the biggest monthly fall since September 1992 according to the latest survey from mortgage lender Halifax.
Economists had been predicting a fall of just 0.4%. The annual rate of house price inflation is now down to 1.1%. Prices in the first quarter of 2008 were 1.0% lower than in 2007 Quarter 4 and Halifax predicts there will be a "modest (low single digit) decline in UK house prices this year".
Worse hit regions in March were the West Midlands and Wales where prices fell by 5% and 4.7% respectively. London held up with prices rising by 1.6%. East Anglia and East Midlands also posted gains.
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"Overall, we expect there to be a modest fall in UK house prices this year. Any declines, however, should be viewed in the context of the significant price rises over recent years. The average UK price has risen by £120,860 during the past decade from £70,696 to £191,556; an increase of 171%," Halifax's chief economist Martin Ellis said.
The Bank of England's Monetary Policy Committee meets this week amid expectations it will cut UK interest rates from 5.25% to 5% to help ease some of the pressure in the housing market.
