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Wednesday, 3 October, 2001, 15:55 GMT 16:55 UK
UK housing market stalls
House in Erdington
House prices were the same in September as in August
The long-predicted slowdown in the UK housing market has begun, the Halifax bank has said.

The average house price last month was, at about 94,000, unchanged from August, the Halifax, the UK's biggest mortgage lender, said.

The stall supports the long-held view of Halifax economists that the downturn in UK economic growth would feed through into property prices, a statement on Wednesday said.

"We have been expecting the general slowdown in the UK economy to curb housing demand and result in an easing in house price inflation during the latter part of this year and into 2002," the briefing said.

"September's figures give further support to this view."

On an annual basis, the rise in house prices came in at 8.3% last month, compared with 10.9% in August.

A separate survey, by the Royal Institute of Chartered Surveyors (RICS) also showed that house price inflation has moderated markedly.

Rate cuts

Not since December, when a 1.1% fall was recorded, has the Halifax monthly survey failed to find a rise in house prices.

"That was when the UK slowdown began to be felt in the market," a bank spokesman told BBC News Online.

But successive interest rate cuts by the Bank of England have supported the market so far this year, with house price inflation peaking in April at 1.8%, he said.

In August, prices rose by a revised 1.4%.

Halifax economists expect house prices to rise by 9% during 2001, although the terrorist attacks on the US have made forecasting difficult, the bank said.

The bank praised central banks worldwide for lowering interest rates following the atrocities, and helping limit the economic affects of the strikes.

Conflicting data

The Halifax figures conflict with data on Monday from the Nationwide building society, which reported a 2.8% rise in prices last month, and a 15% rise since September 2000.

The Halifax said it was "at a loss" to explain the difference.

"Normally they track each other over time, over a period of two or three months they usually have the same trends and the analysis is often very similar," a Nationwide spokesman said.

While Halifax has joined with Bank of Scotland to create HBOS, both businesses have continued to trade under their pre-merger names.

See also:

05 Sep 01 | Business
House price boom continues
04 Sep 01 | Business
Nationwide lifts house price gloom
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