Halifax: House prices drop by 2.2 per cent in October

Date:Friday 7th November 2008
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House prices fell by 2.2 per cent last month, the latest figures from the Halifax House Price Index have shown.

Noting pressure on the incomes of holders of mortgages and the fact that there is less mortgage finance available now than there was last summer, Halifax said that the conditions of the property market "remain challenging".

It added that housing affordability is getting better.

"The house price to average earnings ratio has fallen below 5.0 for the first time for four-and-a-half-years," Halifax stated, while predicting further improvements in the months to come.

The Royal Institution of Chartered Surveyors (Rics) said Halifax's data shows that there is "increasing pressure" in the housing market and observed that house prices are dropping faster now than in the recession of the early 1990s.

Rics also acknowleged that there is a shortage of mortgage finance.

While the Bank of England base rate cut "should provide some support", Rics noted that the crucial question was how much of this reduction is effected into lending rates on the high street.