House prices fall 12.7%

Average house prices have dropped 12.7 per cent in the last 12 months, according to mortgage lender Halifax. The cost of a home slid by a further 1.8 per cent in August to leave the average property costing £174,178. Annual house price inflation, which measures the average cost of a home during the previous three months compared with the same period a year earlier, dropped to 10.9 per cent - a record low for the index and the first time it has hit double digits. The average house price is also now below the Government's new stamp duty threshold of £175,000 according to both the Halifax and Nationwide indexes. The Government announced a package of measures earlier this week to help struggling homeowners and those trying to get on to the property ladder, including increasing the level at which stamp duty kicks in from £125,000 to £175,000 for one year. But the measures received a subdued welcome, with most commentators saying they would do little to boost activity in the housing market. Instead, improving mortgage liquidity is seen as being crucial to improving activity levels, with transactions currently running at around half last year's figure.

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ITN | September 4, 2008