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UK house prices continue to fall

Monday 26th November 2007

The latest Hometrack housing market survey reveals a second consecutive monthly fall in the average UK house price.

A 0.2 per cent fall was recorded in November, with the typical property now selling for £175,700.

With Christmas traditionally introducing a seasonal slowdown in the market each year, a spokesperson for the company predicts it could take until 2008 for house prices to begin to escalate once more.

But even this could be unlikely unless an external factor occurs to restore consumer confidence in the future of the market.

Richard Donnell, director of research at Hometrack, explains: "It is hard to see the catalyst for any short-term turnaround in market confidence other than interest rate cuts early in the new year."

The previous decline was recorded in the organisations October report and measured a marginal 0.1 per cent decrease over the course of the month.

Howard Archer, chief UK and European economist at Global Insight, comments: "The Hometrack survey adds to the impression that the housing market is now cooling significantly in the face of tighter lending practices."

Mr Archer highlights the combined effects of low disposable income, high interest rates and elevated house prices.

This trilogy of factors is likely to "increasingly bite" in the coming months, he anticipates.

He observes that the slower performance of the market over the past two months has led to a decrease in the annual rate of inflation.

This has fallen from five per cent in September to 3.6 per cent in November - a 16-month low, according to Mr Archer.©

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