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Your support makes all the difference.House prices plunged at a new record rate during the year to the end of September - losing 13.2 per cent of their value, Britain's biggest mortgage lender said today.
The fall was the biggest ever recorded by the Halifax house price index, which posted a year-on-year decline of 12.7 per cent in August.
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 per cent, pushing the average cost of a UK home down to £172,108.
But on a brighter note, September saw the smallest monthly fall for seven months- with properties losing 1.3 per cent of their value.
At the same time, the fall of 5.2 per cent during the third quarter was in line with one of 5.1 per cent 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 per cent in September and 12.4 per cent during the past year.
Halifax said the average house price was now at a similar level to January 2006, after losing £27,500 of its value since prices peaked in August last year.
But the decline in values had helped to ease affordability constraints, with the key house price to earnings ratio improving from a peak of 5.84 in July 2007 to 5.02 in July this year - the lowest level for more than four-and-a-half years.
The group said it expected the ratio, which has a long-term average of 4, to continue to improve as prices softened further.
The housing market has been squeezed in recent months by the combination of stretched affordability and the mortgage drought.
The 0.5 per cent fall in interest rates announced yesterday should provide some support for the market, particularly the 36 per cent of borrowers who are on variable rates.
But Howard Archer, chief UK and European economist at Global Insight, said: "House prices seem poised to fall substantially further as the fundamentals remain largely negative.
"Credit conditions remain extremely tight and this continues to exert upward pressure on many mortgage rates and limit the amount of mortgages available. Meanwhile, affordability ratios are still very stretched despite the double-digit fall in house prices seen so far.
"On top of this, faster rising unemployment, heightened concerns over the economic outlook and widespread expectations that house prices will continue to fall markedly seem set to depress housing market activity and prices for some considerable time to come."
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