House price fall biggest since 1990s

LONDON (Reuters) - House prices in November fell at their sharpest monthly rate since the housing market crash of the early 1990s, the nation's biggest mortgage lender Halifax said on Thursday.

House prices fell 2.6 percent on the month, the biggest decline since September 1992, when the housing market was still in deep decline as Britain was just emerging from a year-long recession. That took the three-month annual rate of decline down to 14.9 percent in November, a new low since records began in 1983, Halifax said.

The figures boosted expectations for the Bank of England to deliver another bold cut in interest rates when its monthly meeting concludes at 12 p.m., after last month's shock 1.5 percentage point reduction to 3 percent.

Most analysts reckon the central bank will slash borrowing costs by one percentage points after a raft of dismal data this week suggested the economy has taken a sharp turn for the worse.

"The very sharp fall in house prices reported by the Halifax adds extra late pressure on the Bank of England to deliver a very large interest rate cut today," said Howard Archer, economist at IHS Global Insight.

The Halifax data showed the average price of a home fell to 163,605 pounds, in November, a level not seen since July 2005 and a 18 percent fall from their peak in August 2007.

Last month, Halifax said house prices fell 2.2 percent on the month in October for an annual three-month decline of 13.7 percent.