The fall in UK house prices is accelerating, according to a recent Halifax survey.

The mortgage lender, which is a member of the Lloyds Banking Group, reported that prices fell by another 1.7% in April, pushing the annual decline from 17.5% to 17.7%. Economists had expected a fall of just 1% on the month and a three-month annual decline of 17.7%.

Halifax said that house prices had fallen by 22% since reaching their peak in August 2007. The average UK house is currently worth £154,716, the lowest level since April 2004, and £33,264 less than a year ago.

“We think conditions will remain challenging over the next few months. The fact that the economy is in recession and unemployment is rising sharply is not a great recipe for demand,” said Halifax chief economist Martin Ellis.

“There are some signs that confidence is improving a little bit but we still expect further house price falls.”

At the beginning of April, the Nationwide building society published figures showing a surprise bounce in house prices, whilst the Bank of England reported that mortgage approvals had risen by more than expected in February. However, these latest figures from the Halifax suggest the housing market is still a long way from recovery, and Halifax has predicted that house prices will continue to fall over the coming months.

Falling house prices combined with record low interest rates have meant that houses have become more affordable for those in a position to invest in property. Halifax said that the house price to earnings ratio, a key measure of affordability, fell to 4.26 in April, its lowest point since September 2002.

However, lenders are still limiting the amount of credit available to borrowers, meaning that many potential first-time buyers cannot raise the deposit needed to open a mortgage.

“There are some signs that more deals are becoming available and that the restrictions on credit availability are loosening up a little bit, but it’s still a lot tougher than a couple of years ago,” Ellis said.

This entry was posted on Tuesday, May 5th, 2009 at 9:10 am and is filed under Housing Market, Mortgages. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.