UK house prices fall for second month in May, says Halifax

LONDON: UK house prices fell for a second consecutive month in May, mortgage lender Halifax said on Friday, June 4, in a further sign the recent property market recovery is losing steam.

Halifax said house prices fell by 0.4% in May after April's 0.1% decline, wrongfooting analysts who had forecast a modest increase.

Still, prices were 6.9% higher in the three months to May than the same period a year ago -- the fastest rise on this measure since October 2007 -- and have risen 8.3% since April 2009.

Howard Archer, an economist at Global Insight, said falling employment and muted wage growth were providing headwinds for the property market, despite record low interest rates.

"The second successive drop in house prices reported by the Halifax in May further stokes our relative pessimism over the housing market and reinforces our belief that house prices will find it very difficult to make significant gains over the rest of this year," he said.

Halifax said the average house price last month was £167,570 (RM804,893), 16% below its August 2007 peak.

It noted that more property was coming onto the market and reiterated its forecast for flat house price growth over 2010 as a whole.

"The mixed pattern of monthly price rises and falls so far this year is consistent with a slowing market and is in line with our view that house prices will be flat during 2010 as a whole," said Halifax housing economist Martin Ellis.

Figures from rival mortgage lender Nationwide earlier this week painted a firmer picture, but also suggested price gains were slowing.

According to Nationwide, prices rose by 0.5% in May, half the rate of the previous two months. -- Reuters

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