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| House prices 'fall to 2004 level' | House prices 'fall to 2004 level' |
| (10 minutes later) | |
| The average price of a UK home has fallen to levels not seen since August 2004, according to the Halifax. | The average price of a UK home has fallen to levels not seen since August 2004, according to the Halifax. |
| Prices declined by 2.2% in December, to bring the average cost down to £159,896, the lender said. | Prices declined by 2.2% in December, to bring the average cost down to £159,896, the lender said. |
| On an annual basis, prices were down 16.2% from December 2007, the biggest annual fall since records began. | On an annual basis, prices were down 16.2% from December 2007, the biggest annual fall since records began. |
| Halifax also said homes were more affordable than at any time since April 2003, when set against earnings. But getting a mortgage is harder for many. | Halifax also said homes were more affordable than at any time since April 2003, when set against earnings. But getting a mortgage is harder for many. |
| The figures came as data from the Bank of England said mortgage approvals fell in November to 27,000 - at least a nine-year low. | |
| Continuing pressures on incomes and the availability of mortgage finance are expected to exert future downward pressure on the market over the coming months Martin EllisHalifax chief economist Nationwide ends tracker rate cuts | Continuing pressures on incomes and the availability of mortgage finance are expected to exert future downward pressure on the market over the coming months Martin EllisHalifax chief economist Nationwide ends tracker rate cuts |
| This was the lowest figure since the series began in January 1999. | This was the lowest figure since the series began in January 1999. |
| Subdued | Subdued |
| In monetary terms, mortgage lending rose by £740m in November, but that was still less than a tenth of the amount seen in the same month in 2007. | In monetary terms, mortgage lending rose by £740m in November, but that was still less than a tenth of the amount seen in the same month in 2007. |
| The figures are the latest indication of the extent of the housing downturn and are likely to increase pressure on the commercial banks to start to raise lending levels. | |
| These are still subdued as a result of the financial crisis, despite efforts by the Bank of England to help the banks improve their liquidity. | These are still subdued as a result of the financial crisis, despite efforts by the Bank of England to help the banks improve their liquidity. |
| However, with house prices falling in recent months, and people waiting to see whether mortgages will get significantly cheaper, activity in the mortgage market is likely to remain subdued for sometime. | However, with house prices falling in recent months, and people waiting to see whether mortgages will get significantly cheaper, activity in the mortgage market is likely to remain subdued for sometime. |
| Rate row | Rate row |
| The Halifax said house prices were likely to continue to fall for some time, although stability was returning to market activity, "albeit at a low level". | The Halifax said house prices were likely to continue to fall for some time, although stability was returning to market activity, "albeit at a low level". |
| "Continuing pressures on incomes and the negative impact of the dislocation of the financial markets on the availability of mortgage finance are expected to exert future downward pressure on the market over the coming months," said Halifax chief economist Martin Ellis. | "Continuing pressures on incomes and the negative impact of the dislocation of the financial markets on the availability of mortgage finance are expected to exert future downward pressure on the market over the coming months," said Halifax chief economist Martin Ellis. |
| Economist Howard Archer of IHS Global Insight has predicted that house prices will fall by a further 15% in 2009. | |
| He said there was "a powerful set of negative factors weighing down on the housing market", including continuing tight credit conditions, rising unemployment, and "widespread expectations that house prices are likely to fall a lot further". | |
| The latest housing and mortgage data came as the Nationwide Building Society said it will not pass on any further cuts in UK interest rates to most of its tracker mortgage customers. | The latest housing and mortgage data came as the Nationwide Building Society said it will not pass on any further cuts in UK interest rates to most of its tracker mortgage customers. |
| A clause in the contracts of 250,000 customers says the Nationwide does not have to lower its rates when the Bank of England's rate falls below 2.75%. | A clause in the contracts of 250,000 customers says the Nationwide does not have to lower its rates when the Bank of England's rate falls below 2.75%. |
| While it did not enforce this when the Bank Rate fell to 2% in December, it now says rates will fall no further. | While it did not enforce this when the Bank Rate fell to 2% in December, it now says rates will fall no further. |
| The number of mortgages approved, but not yet lent, is a good indicator of medium-term trends in lending. | The number of mortgages approved, but not yet lent, is a good indicator of medium-term trends in lending. |