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Chaotic housing market expected

Friday June 4th 2010

House prices fell for the second month in a row during May as the property market continued to show signs of slowing down, figures revealed today.

The average cost of a UK home dropped by 0.4% during the month, following a 0.1% dip in April, according to Halifax.

The group said the current mixed pattern of monthly rises and falls was consistent with a slowing market.

It added that it was also in line with its view that house prices would be flat during 2010 as a whole.

The figures contrast with those reported by Nationwide for May, which showed a 0.5% rise in house prices following gains of 1.1% and 1% in April and March respectively.

But they are more in line with recent data from the Bank of England, which showed that the number of mortgages approved for house purchase had failed to recover significantly during April after a subdued start to the year.

Martin Ellis, Halifax housing economist, said: "The relative recovery in house prices in 2009 was driven by a boost to demand from reduced interest rates, combined with a lack of properties for sale.

"These factors have lost some momentum in recent months. Further falls in the number of people in employment are curbing housing demand, whilst the pick-up in market conditions last year has encouraged more homeowners to attempt to sell their property."

Copyright © Press Association 2010

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