House prices have fallen back to the same level they were in 2004, following a 1.7 per cent decline in April, according to the latest Halifax House Price Index.
Bringing the annual fall in house prices to 17.7 per cent, the average property is now at £154,511, the same amount it would have cost in 2004.
But April's fall is marginally smaller than the previous month's, when house prices fell 1.9 per cent, and in the three months to April prices were three per cent lower than in the previous three months.
As an underlying indicator of how the property market is coping with the downturn, this is slightly below the quarterly decline of five to six per cent, which was recorded consistently between June 2008 and January 2009.
For those who have a deposit and are in a position to buy, now is the best time in the last six years to enter the market, Halifax's survey shows, with affordability at its highest. The average house price to earnings ratio has fallen 27 per cent in this period; from its peak of 5.84 in July 2007, it fell to 4.26 in April 2009, nearing the long-term average of 4.0.
rates for existing borrowers fell from an average 5.82 per cent in October 2008 to 3.38 per cent in March this year, the amount of income households are spending on their mortgage payments has also fallen, from a peak of 26.9 per cent in October, to 22.0 per cent in March, an average saving of £111 per month.
Halifax's figures also reveal that thanks to the extension of the temporary increase in the stamp duty threshold to £175,000, 26 per cent of the total homebuyers in England and Wales were exempt from paying stamp duty between September 2008 and January 2009.
Martin Ellis, housing economist at Halifax, said that while house price affordability has improved and monthly mortgage payments have reduced, mortgage approvals remain at historically low levels and there are other factors continuing to have an adverse affect on house prices.
"Rising unemployment, low consumer confidence and the reduced availability of credit are all expected to exert downward pressure on the housing market over the next few months," he said. "As a result, further house price declines are likely."
© Fair Investment