The average UK house price now stands at £174,178 according to the latest Halifax House Price Index, just below the temporarily raised stamp duty threshold of £175,000.
The stamp duty
relief was announced on Tuesday by the Treasury in attempts to boost the flailing housing and mortgage
markets. However, the move has been hit with criticism as experts liken it to a plaster that is not sufficient to heal the UK's current economic problems.
Other news from the Halifax House Price Index agrees with the recent Nationwide study that house prices have fallen by more than 10 per cent year on year. The monthly fall according to Halifax is 1.8 per cent, and has now brought the average house price to the level it was at in February 2006.
And, despite the house price to earnings ratio declining, housing market activity continues to slow as the credit crunch squeezes on households discretionary incomes. Hiked prices are hitting the UK hard as its economy begins a down turn and recession gets closer. As a result, the number of mortgages approved each month is falling, dragging market activity down with them.
However, despite recent reports of job cuts from vulnerable industries, Halifax claims that the UK labour market remains strong, and supportive of the housing market. According to statistics, the number of people in employment increased by 20,000 over the three months to June compared with the previous quarter.
Commenting on the results, Halifax's chief economist Martin Ellis, said: "House prices declined by 1.8 per cent in August. A solid labour market, low interest rates and a shortage of new houses continues to support the market. The pressure on householders' income, together with the reduction in the availability of mortgage finance due to the global financial market crisis, is resulting in both lower property prices and activity levels.
"This week's announcement on stamp duty is a welcome development and will benefit a significant number of homebuyers, particularly outside the south east of England. Market conditions, however, will remain challenging," he concluded.
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