UK house prices fell 0.1% in April, and while marginal, it was the second drop in three months.
Today’s figures from the Halifax house price index are far weaker than last week’s figures from Nationwide which reported that average house prices rose by 1% in the month.
Research firm Capital Economics said today’s marginal fall in house prices was a reminder that the recovery had not had a firm economic foundation.
Ed Stansfield, chief property economist, said: “With the acute supply shortages that characterised the market last year now easing, and the economic recovery set to disappoint, today’s data support our view that, taking 2010 as a whole, house prices will fall by 5%.”
Stansfield said month-on-month discrepancies were not unusual, but on a 3-month/3-month growth rate, both the Halifax and Nationwide indices show the pace of house price increases has eased sharply since the beginning of the year.
“Indeed, the 3m/3m rate reported by the Halifax in April was minus 0.5%. That accords with our view that house prices will give back at least part of their recent gains in the second half of this year,” he said.
