House prices saw a monthly decline of 3.6 per cent last month, according to the latest Halifax House Price Index.
The average UK house price now stands at £162,096 the seasonally adjusted figures suggest, which marks a 3.6 per cent fall compared to August, a quarterly decline of 0.9 per cent, and a 2.6 per cent reduction compared to September 2009.
Commenting on the findings of the Halifax House Price Index, housing economist Martin Ellis said there is no evidence to suggest that this signifies prolonged falls in house prices: "This rate of decline is significantly slower than the quarterly changes of between -5% and -6% that were seen in the second half of 2008. It is therefore far too early to conclude that September's monthly 3.6% fall is the beginning of a sustained period of declining house prices."
He explains that a shortage of properties for sale, as more people become landlords, contributed to an imbalance of supply and demand which was a key factor in house price recovery last year, but a recent increase in the number of properties on the market has redressed this balance.
Renewed anxiety regarding the economy and employment has also contributed, he Mr Ellis said, hitting consumer confidence and diminishing demand for house purchase.
"Together, these factors have been exerting some downward pressure on prices in recent months," he continued. "In addition, volatility of the month on month measure has increased due to the low transaction levels across the market; this underlines the difficulty of getting a clear reading on the current state of the housing market."
He added that "Prospects for the housing market remain uncertain. Earnings growth is expected to be very modest over the next year, tax rises are on the way and more people are putting their homes on the market. These will all be constraints on the market, dampening house prices. On the positive side, we expect interest rates to remain very low for some time, which will underpin the improved affordability position for homeowners."
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