House prices see record fall - Halifax

UK house prices saw their biggest monthly drop in September since records began in 1983, according to Halifax.

The bank revealed that large increases in the number of properties coming on to the market, coupled with a decline in demand, pushed house values down.

Historically low interest rates, which the Bank of England maintained at 0.5% on October 7, have also been linked to the drop in house prices by Halifax.

The lender also revealed that the average cost of a home in the UK is currently £162,096 and total mortgage payments have fallen from 48% of average earnings in 2007 to 30% in 2010.

But the bank did confirm that house prices are still 2.6% higher than they were at this time last year.

Martin Ellis, housing economist at Halifax, said any forecasts of a sustained period of falling house prices would be premature at this point, but said the property market is currently shrouded in uncertainty.

He said: "Earnings growth is expected to be very modest over the next year, tax rises are on the way and more people are putting their homes on the market. These will all be constraints on the market, dampening house prices."

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