Halifax: Annual house prices fall 2.8%

House prices in the three months to February fell 2.8% compared to the same period last year, which is the largest annual decline since October 2009, Halifax reports.

Its research showed that there has been little change in house prices in 2011, with property prices slipping 0.9% in February, thereby offsetting the 0.8% gain seen in January.

However, the underlying trend showed house prices continue to decline, with prices in the three months to February 0.4% down on the previous three months.

Nevertheless, the pace at which prices are falling remains significantly less than the 5% to 6% quarterly declines seen during the second half of 2008.

Halifax highlighted the number of house sales remains low. While mortgages approved for house purchase increased 7% between December and January, according to Bank of England stats, the total for the three months to January was 4% lower than the preceding three months.

Halifax continues to expect a 2% drop in prices in 2011.

Martin Ellis, housing economist for Halifax, says: "Uncertainty over the economic outlook is likely to weigh down on housing demand this year.

"Fewer properties have been coming onto the market in recent months. This trend, if sustained, should improve the balance between demand and supply and help to prevent a more significant fall in house prices."