Page last updated at 11:55 GMT, Friday, 27 March 2009

House price decline accelerates

Unused For Sale signs
The collapse of house prices is speeding up

House prices are falling even faster than before in England and Wales, according to the Land Registry.

Prices dropped by another 2% in February, pushing the annual rate of decline from 15.1% to 16.5%.

It means the average property is now worth £153,862, down by £30,361 in the past year, and back to the level last seen in September 2004.

House price inflation has fallen for 18 months, due to the impact of the recession and the mortgage drought.

The Land Registry's figures confirm the downward trend indicated by other surveys, such as those from the Halifax and the Nationwide.

Hand-in-hand with the fall in prices has gone a slump in sales.

This week the HM Revenue & Customs (HMRC) published figures showing that property sales in the UK hit a new low this year.

There were just 42,000 completed transactions in February, only slightly higher than in January but still half the level seen a year ago.

Earlier this month figures from the Bank of England suggested that the number of mortgages being approved, but not yet lent, had bottomed out at an average of 31,000 for each of the past six months.

But despite surveyors and estate agents reporting a pick-up in enquiries from would-be buyers, there is little evidence so far that this is translating into higher sales.

"Lower prices and the cheap cost of money has begun to fuel an increase in buyer interest as reflected in the RICS "new buyer enquiries" series which has risen for four consecutive months," said Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors (Rics).

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