LONDON (Reuters) - House prices suffered their biggest annual fall in 1-1/2 years in April as worries about the economic outlook deterred buyers, mortgage lender Halifax said on Monday.
The Halifax house price index fell 3.7 percent in the three months to April compared with a year ago, the biggest decline since October 2009, and leaving the average price of a home at 160,395 pounds.
On the month, prices were 1.2 percent lower, the biggest fall since September 2010 and confounding forecasts for a 0.1 percent gain. Prices had been flat in March.
“Weak confidence amongst households, partly due to uncertainty over the economic outlook, is constraining housing demand and resulting in some downward movement in prices,” said Halifax housing economist Martin Ellis.
Britain’s economy has not grown at all since September, raising concerns that the recovery is stalling even before government spending cuts start to bite.
Monday’s figures came after a survey from rival mortgage lender Nationwide last week showed house prices fell 0.2 percent in April, for an annual decline of 1.3 percent and are a further indication that Britain’s housing market is struggling to gain ground.
Analysts reckon that high unemployment, negative real income growth, high debt levels and difficulties in obtaining credit will continue to weigh on the housing market this year.
“The fall in house prices is fully consistent with our view that house prices will trend down gradually overall through the rest of 2011 and the early months of 2012, “ said Howard Archer, economist at IHS Global Insight, who forecasts prices will fall by 5-7 percent this year.
A Reuters poll last month showed analysts expect house prices to fall a median 1.3 percent this year.
Reporting by Fiona Shaikh; Editing by Toby Chopra