According to Halifax, new figures have revealed house prices decreased in February with the average property losing 0.5% of its value.
An average value of a property decreased to £160,118 which is a similar level to April last year. Since last July the average home has lost £3,500 of its value.
House prices are dropping because of the amount of people looking for properties is decreasing due to unemployment levels and economic uncertainty.
Despite January’s 0.6% improvement it means that prices in the three months prior to February were 1.1% lower than the previous quarter. The figures have been revealed after it was announced that increases in mortgage costs would go ahead in May.
However the amount of first time buyers has increased as many are buying properties before the stamp duty holiday is over on the 24th March 2012. The Stamp duty is a percentage tax paid on the purchase of a home or non-residential property. Currently first-time buyers don’t pay stamp duty on purchases of properties worth £250,000 or less.
Martin Ellis, the Halifax housing economist, said: “Overall, prices nationally are at broadly the same level as last spring, this stability in prices is explained by the fact that market conditions have changed very little over this period with demand supported by low interest rates and supply remaining tight.
“Falling inflation should relieve some of the pressure on household finances over the coming months. Many of the economic statistics released in recent weeks have also been encouraging, suggesting that the UK may avoid slipping back into recession.”
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By Amanda Bainbridge