House prices fell by a further 0.4% in May, after the 0.1% fall in April, according to Halifax’s latest housing index.
House prices in May were 6.9% higher on an annual basis. This was the largest increase in the annual rate of change – measured by the average for the latest three months againstthe same period a year earlier – since October 2007 (8.9%).
Despite May’s monthly fall, the annual rate increased from 6.6% in April largely because price movements in March and April compared favourably with the significant declines recorded in the same period in 2009.
Prices are 8.3% above their April 2009 trough despite the modest decline over the past two months. The average house price is now £167,570 16% below its August 2007 peak.
Martin Ellis, Halifax housing economist, said: “The mixed pattern of monthly price rises and falls so far this year is consistent with a slowing market and is in line with our view that house prices will be flat during 2010 as a whole.