House prices fall at fastest rate for a year

House prices fell 0.9 per cent in February, and by 2.8 per cent in the three months to February compared with a year ago, their fastest annual pace in more than a year, mortgage lender Halifax said on Friday.

Halifax said that February's drop offset a 0.8 per cent rise in January, but it expects house prices in 2011 as a whole to fall by around 2 percent, as uncertainty about the economic outlook weighs on housing demand.

"Fewer properties have been coming onto the market in recent months," said Halifax economist Martin Ellis.

"This trend, if sustained, should improve the balance between demand and supply and help to prevent a more significant fall in house prices."

Economists had expected the Halifax index to fall 0.5 per cent on the month, for a 2.5 per cent year-on-year decline for the three months ending in February.