House prices fall again as blizzards freeze market

Charles Church housebuilder Persimmon said visitor numbers to its sites slumped by half, while lender Halifax reported a bigger than expected fall in prices over the month, down 1.3% to £162,435. This left prices 3.4% below a year earlier.

Persimmon chief executive Mike Farley said numbers were "probably down about 50%", but hopes buyers will return over the coming weeks and called the first selling weekend of the new year "encouraging".

The severe weather is the latest blow for the industry after the autumn selling season flopped amid worries over the impact of the Government's October spending review.

But Persimmon also struck a positive note as it flagged up annual profits at the top end of City hopes, around £96 million.

This comes after boosting margins, paying down debts and shifting its building mix towards more profitable houses.

The firm plans around 70 new sites this year, mainly in more resilient Southern markets.

"It's going to be a cautious year, both for ourselves and the man in the street," Farley added.

Halifax, meanwhile, expects "limited movement" in prices this year as rock-bottom interest rates limit the number of forced sellers.

Prices fell 0.9% in the final three months of 2010 compared to the previous three months.

But Halifax housing economist Martin Ellis said the risk to prices was on the "downside", warning: "Uncertainty about the economy, weak earnings growth and higher taxes could put some downward pressure on demand."

Experts said the price falls also mask big differences in regional markets.

James Scott-Lee, chairman of estate agent Chancellors, said: "Poor-quality properties in areas of oversupply are under real pressure, but sought-after properties in areas of high demand are still performing well.

"Come the end of 2011, we expect prices in London and the South East to be higher than they are at present, while towns and cities in the north could suffer further price falls."