House prices fall for third month

By Christina Fincher

LONDON (Reuters) - House prices fell for a third month running in November, according to mortgage lender HBOS, raising pressure on the Bank of England to cut interest rates this week.

HBOS's Halifax index showed house prices fell 1.1 percent last month, its steepest decline this year. That followed a 0.7 percent fall in October, and a 0.6 percent decrease in September.

It was the first time house prices have fallen for three months in a row since 1995.

Sterling tumbled as investors bet a slowing housing market, coupled with fresh signs of weakness in the broader economy, would prompt the Bank to cut interest rates on Thursday to shore up growth.

"Coming on the back of two firmly negative prints, today's decline firmly underlines the fact that the UK housing market is shifting down a gear," said Richard McGuire, strategist at RBC Capital Markets.

All major house price indicators are now pointing to falling prices. The Nationwide building society has yet to report data for November but said house prices in October fell at their fastest rate in 12 years.

PROLONGED DOWNTURN?

A cocktail of tighter lending conditions, falling confidence and financial market turbulence is raising concern that the market, which had looked set for a gentle slowdown, could enter a more prolonged downturn.