House prices continue to drop in the first-quarter

THE cost of housing fell by 0.6 per cent during the first-quarter of 2011, marking the property market’s fourth consecutive quarterly decrease in prices, it was yesterday revealed.

Research by the Halifax <a href="";>House Price</a> Index showed an average reduction of 2.9 per cent for the first three months of 2011 in comparison to the same period last year. This marks the biggest annual decline in the market since October 2009.

“Our forecast remains for a two per cent decrease in house prices in 2011 as a whole,” commented Martin Ellis, housing economist, “Uncertainty over the general economic outlook and individual financial circumstances are likely to constrain housing demand, resulting in some modest downward pressure on prices.”

Recent increases in employment, particularly in full-time jobs, were thought to be the cause of a marginal March price rise of 0.1 per cent on figures for the end of 2010, leaving an average house costing £162,912 in the UK.

Halifax also warned that the coalition government’s FirstBuy scheme would have a limited future impact on the housing market since the shared equity plan will assist only the equivalent of five per cent of 2010’s first-time buyers.