Stomach for a tough ride?

7 October 2010 By Ian Campbell

The 3.6 pct monthly fall in the Halifax house price index looks worse than it is, after rises in recent months. But house prices are likely to slide, and the shocking number may make the government nervous about cuts. Even so, the coalition mustn’t be diverted from tough action.

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The UK house price index from the Halifax showed a fall of 3.6 percent in the average price of a home in September, a record monthly fall.

The Halifax said that quarterly figures showing a 0.9 percent fall in the third quarter from the second gave a better indication of the underlying trend in prices.

The rate of decline was significantly slower than the quarterly changes of between 5 and 6 percent in the second half of 2008, Halifax added. It was "therefore far too early to conclude" that September's big price fall is the beginning of a sustained period of declining house prices, it said.

The UK Treasury said on Oct. 7 there has not been any decision to push back the government's spending cuts programme, but administrative hurdles could lead to some slippage.

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