House prices fall at record rate

LONDON (Reuters) - House prices fell for a sixth month in a row in July to the lowest in two years, Britain's biggest mortgage lender HBOS said on Thursday, in a further sign the housing market is cooling sharply.

Prices fell 1.7 percent on the month, according to the bank's Halifax house price index, slightly greater than analyst forecasts for a 1.5 percent drop.

Halifax said the average price of house was 177,351 pounds, down 11 percent from the peak of 199,600 pounds hit in August last year.

"Pressure on householders' income, together with a very significant reduction in mortgage finance due to the global financial markets crisis, is constraining potential house buyers' ability to enter the market," said Suren Thiru, economist at Halifax.

Prices in the three months to July were 8.8 percent lower than a year ago, against forecasts for a 8.5 percent decline.

(Reporting by Nigel Davies and Matt Falloon; Editing by Victoria Main)