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House prices fall of 1.4% recorded

Continued pressure from Government spending cuts and the mortgage drought saw house prices drop 1.4 per cent in January - the eighth consecutive month in which the annual rate of house price inflation fell.

This meant the average cost of a home was only 0.5 per cent higher than in January 2010 at £208,552, said the Department for Communities and Local Government. The new rise was much lower than that of 3.8 per cent last December.

Property prices fell 0.4 per cent in the quarter to the end of January, up on a 0.3 per cent drop in the three months to the end of October.

The three-month-on-three-month change, generally seen as a smoother indicator of market trends, pointed to an acceleration in the rate at which prices are falling.

House prices are under pressure as potential buyers wait in the face of the looming Government spending cuts and economic uncertainty. Potential buyers continue to struggle to raise the mortgage finance.

Annual house price growth is negative in seven regions, with Northern Ireland continuing to see the biggest year-on-year drop of 14.1 per cent, followed by Yorkshire and Humberside at 4.6 per cent, and Scotland and the West Midlands both recording a 3.2 per cent decline.

Copyright © Press Association 2011

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