Second house price drop

House prices fell for the second month in a row in October, but Halifax has stressed it does not suggest a crash.

Britain's biggest mortgage lender said prices dropped by 0.5 per cent last month and 0.6 per cent in September - the first consecutive falls since April and May 2005.

October's decline also meant the average cost of a home in the UK again failed to break through the £200,000 barrier, with the average property price now £197,248.

Halifax said the falls were a "typical feature" of a more subdued housing market, and were not signs of a wider crash.

The group's chief economist, Martin Ellis, said: "The rise in interest rates since August last year and negative real earnings growth so far this year are curbing housing demand, leading to a slowdown in both price growth and activity.

"The UK economy is in a strong position. Sound market fundamentals, including high levels of employment and a shortage in the number of properties available for sale, will continue to support house prices."

The figures contrasted with those released by Nationwide building society last week which showed house prices jumping by 1.1 per cent during October.

But other indexes are pointing to a cooling market in the face of higher interest rates and tighter lending conditions from banks and building societies.

The Royal Institution of Chartered Surveyors said the cost of property fell at its fastest rate for two years during September, while the number of people looking to buy a new home dropped for the 10th month in a row.

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