Halifax, the UK’s biggest mortgage lender, says house prices saw an annual fall of 0.9% in April, and dropped by 1.3% compared with March, according to data released today. The news, which follows rival Nationwide’s report of a 1% fall in year-on-year prices, is expected to add to the economic uncertainty already being felt on the high street.
The HBOS-owned bank says a squeeze on spending power and a decline in “real” earnings over the past year were among the factors behind the first year-on-year fall in prices since February 1996. Another was the rapid rise in house prices in the last few years.
Halifax says the number of mortgages approved to finance house purchases in the first quarter of 2008 was 41% lower than a year earlier. Earlier this year, the Bank of England said that new mortgage approvals had fallen to their lowest level since records began in 1990.
Halifax, which is reviewing its advertising held by Delaney Lund Knox Warren, is among the lenders who have pushed up interest rates and tightened their lending criteria in order to lessen their exposure to bad debt.