Released on: October 9, 2007, 11:56 am

Press Release Author: Jim watson

Industry: Real Estate

Press Release Summary: Given the recent declines in house price rises, it was
perhaps only to be expected that there would soon be a fall in UK house prices.
Finally that time appears to have arrived, with the latest Halifax figures, which
show that overall prices across the country dropped by 0.6 per cent.


Press Release Body: Given the recent declines in house price rises, it was perhaps
only to be expected that there would soon be a fall in UK house prices. Finally that
time appears to have arrived, with the latest Halifax figures, which show that
overall prices across the country dropped by 0.6 per cent.

The figure tallied with two other, longer-term figures which suggested that it had
just been a matter of time before this happened. Firstly, the quarterly trend showed
a rise in house prices of just 0.9 per cent to the end of September, compared with
2.3 per cent in the second quarter, while the annual rate fell from 11.4 per cent in
August to 10.7 per cent in September.

However, the Financial Times notes, the Halifax figures were not the only ones
published today. Nationwide\'s figures for September do show a slightly different
picture, with an increase of 0.7 per cent, in line with the common trend in most
surveys of the last few months for prices to rise by under one per cent.

Over the last quarter, Nationwide also states a higher house price inflation rate at
1.6 per cent, although it records the annual rate as dropping from 10.2 per cent in
August to 9.3 per cent in September. Only Wales shows a drop in third quarter
prices, by 0.3 per cent. Overall, therefore, these statistics indicate slowdown but
not yet deflation.

Thus some may argue that the evidence is inconclusive at this stage, with October\'s
statistics likely to give a clearer picture of emerging trends, while others may
suggest the Halifax news is the tip of the iceberg.

Howard Archer of Global Insight took the latter view, telling the BBC: \"Evidence is
mounting that the housing market is now cooling markedly in the face of the
financial market turmoil and the increasing affordability pressure on house buyers\".


The bank\'s own view is more positive, however, with chief economist Martin Ellis
stating: \"The UK economy is in a strong position. Sound market fundamentals,
including high levels of employment and a shortage in the number of properties
available for sale, will continue to support house prices.\"

How prices move in the next few months may also depend on how soon interest rates
start to fall. Today the Bank of England\'s monetary policy committee (MPC) left
rates on hold for the third month running, although whether the decision was
unanimous for three months in a row will be unknown until the minutes appear on
October the 17th.

The decision today was no surprise - a poll of analysts by Reuters last week found
all 56 of them tipped a hold - but opinion is divided over when there will be a cut.
Ten of those same 56 economists said such a move would happen this year. Responding
to today\'s decision, the Council of Mortgage Lenders director general Michael Coogan
said a cut would probably come next month. Meanwhile Ray Boulger, spokesman for John
Charcol, said whether rates were likely to fall next month may not be clear until
the minutes are published.

Whatever the predictions, there is undoubtedly pressure on the MPC for a cut. Mr
Boulger said today\'s decision was a \"missed opportunity\", while the fair Investmnet
Company\'s director James Caldwell called it \"disappointing for homeowners\", albeit
\"understandable\" in the current uncertain economic climate.

A rate cut may help curb a downward trend in the housing market. It will also be
good news for those with mortgages, including buy-to-let. The housing market figures
and interest rate decisions next month could be well worth watching out for

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