House prices in record monthly fall

House prices dropped 3.6 per cent in September from the previous month, according to the latest figures from the Halifax.

It represented the biggest monthly drop since figures were first compiled in 1983.

The group said an increase in the number of properties on the market, combined with a drop in demand fuelled by uncertainty over the economy, forced prices down.

Martin Ellis, housing economist with Halifax, said it is too early to conclude that September's fall represents the beginning of a sustained period of declining house prices.

He added: "Looking at quarterly figures – a better measure of the underlying trend - house prices in the third quarter of 2010 were 0.9 per cent lower than in the second quarter of 2010.

"This rate of decline is significantly slower than the quarterly changes of between minus five per cent and minus six per cent that were seen in the second half of 2008."

The average UK home is now valued at £162,096, the survey found.