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Halifax fall in house prices leads to property market confusion

07 March 2005
Figures released on Friday by Halifax suggest a fall in house prices, pointing towards the end of the long-running property boom and sparking confusion and debate about the state of the housing market.

The building society's research shows that house prices dropped by 0.5 per cent in February, bringing the cost of the average home to £162,816, just 0.8 per cent higher than it was in June 2004.

Compared with 12 months ago, property values are 12.1 per cent higher, making the smallest annual increase since 2001.

Halifax was the third body to release research about house prices last week, leading to some confusion about where the housing market is going.

Halifax itself maintains that the figures indicate a market slowdown: "this continues the mixed pattern of monthly price rises and falls recorded since last summer and is consistent with a gradual slowdown in house price inflation," said the mortgage lender's chief economist, Martin Ellis.

However, rival building society Nationwide said last Tuesday that property prices rose by 0.5 per cent, the exact amount that Halifax said they fell by.

While on Monday Hometrack, which monitors prices at estate agents, found property prices fell 0.2 per cent in February - the eighth month in a row where it has seen values drop - although it predicted that house prices were set to start rising again in March.

Speaking about the Halifax figures, Ed Stansfield, an economist at Capital Economics, told Reuters: "The latest survey of house prices ... serves only to add to the already confused picture of what is really happening on the ground."

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