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Halifax: surprise house price tumble

09 January 2007
House prices statistics from Halifax surprised commentators by falling in December.

The average cost of a home fell by one per cent, or nearly £2,000, to £186,035.

According to Halifax figures, house prices had risen by 1.6 per cent in November, prompting fears that two interest rate rises in August and November would be insufficient to tame price growth.

Halifax's chief economist Martin Ellis described the statistics as evidence of "a change in direction" following "two rate rises in fairly quick succession".

The fall in prices failed to dent the net rise over the three-month period compared to the same period in 2005, which rose from 9.6 per cent in the previous quarter to 9.9 per cent.

The Halifax statistics contradict the findings of a Nationwide survey which reported house prices rose 1.2 per cent in December.

Richard McGuire, strategist at RBC Capital Markets, told Reuters the Halifax report was "more the exception than the rule" and would pose "little challenge to growing expectations the Bank of England will deliver a further hike next month".

The Bank of England last week revealed that more mortgages were approved in November than at any time since December 2003.

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