According to Halifax, house prices had dropped by 17.7% in April compare to last year. It is recorded as another 1.7% fall compare to the previous month. Experts predicted a further decrease in house prices despite “improvement in the affordability of housing”, says Halifax.

Housing Market Report from Halifax in April

Halifax reported a decrease of 1.7% in average UK property prices during April, pushing an annual fall from 17.5% to 17.7% in the property market. The average house price has fallen to £154,716 as the result from an annual fall of £33,264. This figure has returned to the level as last seen in April 2004, statistically suggesting that the house price has hit the five-year-low.

Moreover, the house price to earnings ratio (i.e. the key measure to affordability) in April 2009 has dropped from 5.35 in April 2008 to the lowest of 4.26 since 2002.

Furthermore, the lowest stamp duty threshold, increased from 125,000 to £175,000 since 3^rd September 2008, had saved and benefited buyers in England and Wales. According to Halifax estimates, about 45,500 buyers (more than a quarter of homebuyers) were exempt from paying stamp duty over five months from September 2008 to January 2009, helping them to battle through recession.

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The above average house pricing figures suggested that the property market still has “a long way from recovery”, told by Halifax.

The house prices, in fact, had a slight improvement from 1.9% drop in the previous month; yet, had turned out to be worse and weaker than what had been expected. Experts and Economists had forecast a decrease of only 1% on the month, which turned out to be 1.7% drop. The unexpected triggered the economists to re-calculate and predict the housing market in following months:-

i. Martin Ellis, Chief Economist of Halifax, predicted and warned that the house price in the property market would decline further over the next few months contributed by the following three factors: constant and rapid increase in unemployment rate, low in consumers’ confidence as well as the decline and reduction of the availability of credit.

ii. On the other hand, Nationwide reported the largest increase in two years in consumer confidence index in April 2009 reflected “the recession, while not exactly easing, certainly doesn’t appear to be getting worse”*. However, further agreed with Martin Ellis, Martin Gahbauer - Senior Economist at Nationwide stated that “the UK economy will continue to contract for some time yet”* and the rise in consumer confidence does not necessarily represent an upturn of the property market.