This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.

You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/business/7597520.stm

The article has changed 3 times. There is an RSS feed of changes available.

Version 0 Version 1
House prices in double digit fall House prices in double digit fall
(about 1 hour later)
UK house prices recorded an annual fall of 10.9% in August - the first double digit drop since 1983 says the Halifax.UK house prices recorded an annual fall of 10.9% in August - the first double digit drop since 1983 says the Halifax.
The lender said that property prices dropped 1.8% in August compared with July, leaving the cost of an average home in the UK at £174,178.The lender said that property prices dropped 1.8% in August compared with July, leaving the cost of an average home in the UK at £174,178.
It said market conditions would remain "challenging" in the months ahead, despite government help for buyers.It said market conditions would remain "challenging" in the months ahead, despite government help for buyers.
House prices dropped across the UK, but some surveys have shown the Scottish market to be the most resilient.House prices dropped across the UK, but some surveys have shown the Scottish market to be the most resilient.
The figures show that the average price of a home in the UK was at the same level in August 2008 as it was in February 2006.The figures show that the average price of a home in the UK was at the same level in August 2008 as it was in February 2006.
Interest ratesInterest rates
The figures were released just a few hours before the Bank of England's Monetary Policy Committee was set to announce its latest decision on interest rates.The figures were released just a few hours before the Bank of England's Monetary Policy Committee was set to announce its latest decision on interest rates.
They also came two days after the government announced measures aimed at supporting homeowners and buyers, such as temporarily raising the threshold at which stamp duty is paid from £125,000 to £175,000.They also came two days after the government announced measures aimed at supporting homeowners and buyers, such as temporarily raising the threshold at which stamp duty is paid from £125,000 to £175,000.
"This week's announcement on stamp duty is a welcome development and will benefit a significant number of homebuyers, particularly outside the South East of England. Market conditions, however, will remain challenging," said Halifax chief economist Martin Ellis."This week's announcement on stamp duty is a welcome development and will benefit a significant number of homebuyers, particularly outside the South East of England. Market conditions, however, will remain challenging," said Halifax chief economist Martin Ellis.
He said that pressure on householders' income, and the mortgage squeeze, were still driving prices and housing market activity down.He said that pressure on householders' income, and the mortgage squeeze, were still driving prices and housing market activity down.
The Halifax calculates the annual change using an average of the last three months, compared with the same three months a year earlier. The lender says this smoothes out short-term fluctuations.The Halifax calculates the annual change using an average of the last three months, compared with the same three months a year earlier. The lender says this smoothes out short-term fluctuations.
This was the first time the figure has fallen by double-digits since the survey began in 1983.This was the first time the figure has fallen by double-digits since the survey began in 1983.
Comparing the average price for August alone, there was a 12.7% fall from £199,612 in August 2007 to £174,178 in August 2008.Comparing the average price for August alone, there was a 12.7% fall from £199,612 in August 2007 to £174,178 in August 2008.
Labour marketLabour market
Mr Ellis said that strong levels of employment and low interest rates were helping to underpin the housing market.Mr Ellis said that strong levels of employment and low interest rates were helping to underpin the housing market.
The measures announced by the government this week may be able to put a floor under the recent slide in house purchase activity Allan MonksJPMorgan Chase BankThe measures announced by the government this week may be able to put a floor under the recent slide in house purchase activity Allan MonksJPMorgan Chase Bank
But a "pinch on incomes" with higher food and fuel bills, as well as a lack of availability of mortgages, was making it difficult for people to enter the market.But a "pinch on incomes" with higher food and fuel bills, as well as a lack of availability of mortgages, was making it difficult for people to enter the market.
Melanie Bien, of Savills Private Finance, told the BBC that mortgage costs was starting to dip for existing mortgage holders because the cost to banks of borrowing between each other was decreasing.Melanie Bien, of Savills Private Finance, told the BBC that mortgage costs was starting to dip for existing mortgage holders because the cost to banks of borrowing between each other was decreasing.
Yet she added that the fall in property prices was not a surprise and she was expecting these falls to continue into next year.Yet she added that the fall in property prices was not a surprise and she was expecting these falls to continue into next year.
Stamp dutyStamp duty
Halifax's figures suggest that the price of an average home has now fallen below the £175,000 starting figure for the next year of 1% stamp duty.Halifax's figures suggest that the price of an average home has now fallen below the £175,000 starting figure for the next year of 1% stamp duty.
But the picture differs across the country. The Halifax said that in the year from July 2007, only 12% of total sales were below £175,000 in London, compared with 75% in the North of England.But the picture differs across the country. The Halifax said that in the year from July 2007, only 12% of total sales were below £175,000 in London, compared with 75% in the North of England.
"The measures announced by the government this week may be able to put a floor under the recent slide in house purchase activity," said Allan Monks of JP Morgan Chase Bank."The measures announced by the government this week may be able to put a floor under the recent slide in house purchase activity," said Allan Monks of JP Morgan Chase Bank.
"But the changes by themselves look unlikely to meaningfully revive the market, given the reasons why transactions have fallen to such lows in the first place."But the changes by themselves look unlikely to meaningfully revive the market, given the reasons why transactions have fallen to such lows in the first place.
"News that house prices are still falling close to 2% month-on-month and the expectation of further declines is likely to be an important factor limiting the scope for a quick recovery.""News that house prices are still falling close to 2% month-on-month and the expectation of further declines is likely to be an important factor limiting the scope for a quick recovery."
And Seema Shah, of Capital Economics, said that the benefits of the stamp duty saving would be "wiped out in less than a month".And Seema Shah, of Capital Economics, said that the benefits of the stamp duty saving would be "wiped out in less than a month".
"Over the past six months, house prices on the Halifax index have fallen by an average £2,900 a month, greater than the maximum potential saving of £1,750 to a buyer from the recently introduced stamp duty holiday," she said."Over the past six months, house prices on the Halifax index have fallen by an average £2,900 a month, greater than the maximum potential saving of £1,750 to a buyer from the recently introduced stamp duty holiday," she said.
A slowdown in transactions suggests many buyers are delaying as prices continue to fall.A slowdown in transactions suggests many buyers are delaying as prices continue to fall.
A spokesman for the Department of Communities and Local Government said that UK house prices were still significantly higher than five years ago.
"The current issue affecting the market is largely about the supply of credit, a very different situation to the early 1990s which was about high interest rates and unemployment," he said.