4 March 2011
Last updated at 03:31 ET
UK house prices fell by 0.9% in February compared with the previous month, cancelling out a rise in January, the Halifax has said.
The lender, now part of Lloyds Banking Group, said that year-on-year prices had dropped by 2.8% in February.
This meant the typical home in the UK now costs £162,657.
The uncertain economic climate was likely to “weigh down” the housing market, leading to a modest fall in prices in 2011, the lender said.
The month-on-month fall offset the 0.9% rise in property values reported by the lender in January.
However, the less volatile quarter-on-quarter trend showed a 0.4% drop in prices in the three months to the end of February.
Martin Ellis, housing economist at the Halifax, predicted a “modest” 2% drop in prices in 2011, owing primarily to buyer and seller uncertainty.
“Fewer properties have been coming onto the market in recent months,” he said.
“This trend, if sustained, should improve the balance between demand and supply and help to prevent a more significant fall in house prices.”
The Halifax uses a smoothed-out quarterly comparison to calculate annual house price changes. It recorded a 2.8% fall year-on-year in the three months to the end February, the biggest annual decline since October 2009.
‘February dip’ for house prices