UK () - December, and the outlook for this year is “uncertain,” Halifax said.
Values fell 0.9 percent from November, when they dropped a revised 1 percent, the unit of Lloyds Banking Group Plc (LLOY), Britain’s largest mortgage provider, said in a statement in London today. From a year earlier, values fell 2.2 percent to an average 160,063 pounds ($248,000), the lowest level (UKHBASTP) since July 2009.
Halifax forecast last month that property values will rise or fall no more than 2 percent this year as the balance between weak demand and a shortage of supply leaves the market without direction. Nationwide Building Society and property researcher Hometrack Ltd have both forecast a decline in prices.
“If the U.K. can avoid recession, we expect broad stability in house prices in 2012,” Halifax economist Martin Ellis said in the statement. “There is, however, considerable uncertainty regarding the prospects for the U.K. economy which will, to a large extent, depend on how events in the euro zone unfold. In addition, the extent to which households choose to reduce their debts will also affect growth.”
‘Pressure’
In the fourth quarter, home values fell 0.1 percent from the previous three months and were down 1.3 percent from a year earlier, Halifax said. Noting the annual decline, Ellis said prices “held up well in the face of the difficult and deteriorating economic climate and substantial pressure on households’ finances.”
In 2011, prices fell for six months, rose in five and were unchanged in one month.
Central bank policy makers will keep their benchmark interest rate (UKBRBASE) at 0.5 percent this month, helping to keep mortgage costs low, according to all 44 economists in a Bloomberg News survey. They will also hold their target for asset purchases (UKAPTARG) at 275 billion pounds to help support the recovery, all but one of 31 economists in another survey said.
Nevertheless, data from the central bank this week showed mortgage approvals were little changed in November, underlining the fragility of the housing market.
U.K. banks expect the proportion of mortgage applications being approved to fall in the current quarter as lenders respond to strains in funding markets by tightening the credit-scoring criteria on home loans, the Bank of England said in a report yesterday.