Drop in house prices easing

HOUSE prices only fell marginally in May compared to the previous month, taking the annual decline to 12.5 per cent, data from the Department for Communities and Local Government (DCLG) showed yesterday.<br /><br />In the three months to May, UK house prices fell by 0.4 per cent compared to a fall of 4.8 per cent in the previous quarter ending February. The average price of a UK house now stands at &pound;188,991.<br /><br />Annual average house prices fell by 12.8 per cent in England, while they dropped 8.8 per cent in Wales and 6.9 per cent in Scotland. Northern Ireland experienced the worst fall, with prices dropping 23.2 per cent on May 2008.<br /><br />First-time buyers were on average paying 14.8 per cent less than they were in May 2008, suggesting that affordability is improving.<br /><br />The survey is seen as the most comprehensive housing market analysis, but it should be noted that it provides lagging evidence on house prices. <br /><br />Howard Archer at IHS Global Insight said that it was best to draw an overall impression from all the survey data available and it seems that house prices have recently gained some overall support from markedly increased buyer interest.<br /><br />&ldquo;We suspect that house prices have not yet bottomed out. While buyer interest has clearly picked up markedly in recent months, this has so far translated only gradually into increased house sales,&rdquo; he says.<br /><br />Latest data from the Bank of England shows that mortgage approvals for house purchases hit a 13-month high of 43,414 in May, but this is still under half the monthly average seen during 1983-2008.