House prices drop in October

House prices in the UK fell in October, a new study has suggested.

According to Halifax, house prices dipped by 0.5 per cent during the month. This means that the annual rate of house price inflation is now 8.9 per cent.

Halifax calculated that house prices in the three months to October were just 0.3 per cent higher than in the previous quarter.

Overall, the lender found that the typical house in the UK now costs £197,248.

It also noted that activity on the housing market appears to be slowing. Mortgage approvals fell by six per cent in September and approvals in the third quarter of 2007 were 11 per cent lower corresponding months in 2006.

"Prices in the three months to October were 0.3 per cent higher than in the previous quarter - a good guide to the underlying trend - continuing the steady easing in house price growth since the end of 2006," explained Martin Ellis, chief economist at Halifax.

"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."

Yesterday (November 8th), the Bank of England opted to hold interest rates at 5.75 per cent.

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