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House prices fall 0.9% in February, says Halifax

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Media captionWatch: "Very much a buyers' market", says Martin Ellis from the Halifax

UK house prices fell by 0.9% in February compared with the previous month, cancelling out a rise in January, the Halifax has said.

The lender, now part of Lloyds Banking Group, said that year-on-year prices had dropped by 2.8% in February.

This meant the typical home in the UK now costs £162,657.

The uncertain economic climate was likely to "weigh down" the housing market, leading to a modest fall in prices in 2011, the lender said.

Trend

The month-on-month fall offset the 0.9% rise in property values reported by the lender in January.

However, the less volatile quarter-on-quarter trend showed a 0.4% drop in prices in the three months to the end of February.

Martin Ellis, housing economist at the Halifax, predicted a "modest" 2% drop in prices in 2011, owing primarily to buyer and seller uncertainty.

"Fewer properties have been coming onto the market in recent months," he said.

"This trend, if sustained, should improve the balance between demand and supply and help to prevent a more significant fall in house prices."

The Halifax uses a smoothed-out quarterly comparison to calculate annual house price changes. It recorded a 2.8% fall year-on-year in the three months to the end February, the biggest annual decline since October 2009.

This fall would be slightly lower, at 2.6%, if the average price of a property in February alone was compared with February 2010.

Comparison

Earlier in the week, Nationwide Building Society suggested that house prices in February were 0.1% lower than a year earlier, but 0.3% higher than in January.

However, the general trend recorded by house price surveys has been one of a tepid market during the turn of the year.

The Land Registry's survey, considered to be the most comprehensive but which lags behind other house price data, found house prices in England and Wales dipped by 0.9% in January compared with January 2010, but rose 0.2% compared with December.

It found that each property type - detached, semi-detached, flats and terraced - fell in value in January compared with a year earlier.

A survey by the Royal Institution of Chartered Surveyors, published on Thursday, found the cost of renting a home rose at a rapid rate in the three months to January.

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