House prices fall for sixth month

LONDON (Reuters) - House prices in England and Wales fell for a sixth month running in March, pushing the annual rate of inflation to its lowest in two years, a survey shows.

However, there were tentative signs of stabilisation of demand with transaction levels picking up and new buyer registrations rising for a second month.

Housing market research company Hometrack said house prices fell by 0.2 percent this month to stand just 0.4 percent higher than in March 2007. In February, house prices fell by 0.2 to stand 1.4 percent higher in annual terms.

The figures are not adjusted to take seasonal factors into account.

The average time taken to sell a property held steady at 8.5 weeks -- jointly the longest period since the survey began in 2001.

"Some bounce-back in market activity was inevitable after what has been a prolonged period of weak market activity," said Richard Donnell, Director of Research.

"However the growth in demand over the last two months is only a third of the level seen in previous years so the spring market is likely to be a non event this year."

Surveys by mortgage lenders and surveyors have painted a gloomy picture and there has been little sign that lower official interest rates are doing anything to support the market.

Last week, three of Britain's biggest mortgage lenders actually raised their standard home loan rate, blaming the global credit crunch for raising the cost of borrowing in interbank markets.