UK House price slowdown continues

According to the UK's biggest mortgage lender house prices in the UK are continuing to slow down. The Halifax publishes a monthly survey and the latest one shows that prices across the UK fell 0.3% in February. The annual rate of House Price Inflation in the UK has fallen from 4.5% to 4.2%. The mortgage lender predicts that prices will remain flat in the coming year provided that the economy and employment continued to grow.

The Halifax estimates the average UK home now costs £196,649. According to Martin Ellis, the Halifax's chief economist.

"Whilst the housing market has slowed over the past six months, it is supported by sound economic fundamentals. Interest rate cuts by the Bank of England are also helping to underpin house prices."

The past year has seen a significant decline in the UK property market from peak levels of activity with falling sales and a 39% drop in mortgage approvals.

The Halifax survey shows some different conclusions compared to reports by the Nationwide building society, one of it's main rivals. The Halifax estimates a less dramatic slowdown.

The Nationwide's survey In February showed a fourth monthly price fall in a row and said the pace of decline was speeding up with prices in the three months to February 1% lower than in the previous three.

And the conclusion from all this? there is little doubt that a very significant cooling of the Housing market has taken place and that this is continuing. There seems to be no strong evidence at the moment however that this is going to lead to a real crash in house prices. The correction that is taking place may be painful for some but others such as first time buyers may at some stage become beneficiaries.