Industry plays down drop in house prices
This led some commentators to conclude that we have embarked on the second leg of the downward house price spiral, even though prices are still 2.6 per cent higher on average across the UK than a year ago.
Yet the Halifax itself warned that one month's figures should not be taken in isolation, and pointed to the quarterly figures, which it said was a more reliable indicator of underlying trends.
Nevertheless, this still showed an average 0.9 per cent fall in prices over the three months to September although the bank pointed out that the rate of decline is significantly slower than the quarterly falls of between 5 and 6 per cent in the second half of 2008.
Activity in the housing market is also subdued, falling to 47,400 transactions in August. However, this is put down to the uncertainty surrounding job cuts in the public sector, and other squeezes on family incomes.
Howard Archer, chief UK economist at IHS Global Insight, said: "The Halifax data will undoubtedly raise fears of a housing market crash. However, it is important to put the data into perspective. The data highlights how volatile housing data can be."
Alan Cleary, managing director of Precise Mortgages,added: "The property market is pausing for breath ahead of the government spending review scheduled later this month. This has led to lower transaction volumes from buyers and sellers and lending levels as a result."
Ray Boulger, a mortgage broker at John Charcol predicted: "We could see prices next month bounce back a little. Prices are very volatile right now, as in some areas and for some kinds of properties there are not enough sales to make a fair representation of values in that market.
"I don't see house prices going anywhere much over the next year, but I do not believe they will crash either."