House prices fall at record rate

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The year-on-year rate of decline hit 13.3% in September, the biggest fall ever recorded by the Halifax house price index.

The rate of decline was higher than previously thought after the group revised house prices for September last year upwards due to a seasonal adjustment for the month.

Annual house price inflation, which measures prices during the previous three months compared with the same period a year ago, also dropped to a new record low, with falls of 12.4%.

The average UK home now costs £172,108, around the same level as in January 2006.

But on a brighter note, house price falls for September itself were the lowest for seven months at 1.3%.

At the same time, the fall of 5.2% during the third quarter was in line with one of 5.1% during the second quarter, suggesting the rate at which prices are falling could be stabilising.

Martin Ellis, Halifax chief economist, said: "The overall price decrease in the three months to September was very similar to that in the previous quarter, indicating that the trend rate of decline may be beginning to stabilise.

"The ongoing pressures on householders' income, combined with the reduction in the availability of mortgage finance, however, mean that market conditions will remain challenging."

The figures, which were in line with analysts' expectations, were broadly similar to those reported by Nationwide last week, which showed that house prices fell by 1.7% in September and 12.4% during the past year.