Halifax detects further house price drop

A further 1.7 percent decline in the average UK house price was detected last month by lender Halifax.

According to the firm's latest survey, prices now stand at 8.8 percent less than one year ago - a rate of decline up from June's reading of 6.6 percent. The new research also pegged the average cost of a property at just £177,351 nationwide.

Speaking to the BBC, Halifax economist Suren Thiru said: "Pressure on householders' income, together with a very significant reduction in mortgage finance due to the global financial markets crisis, is constraining potential house buyers' ability to enter the market. This is resulting in both lower prices and activity levels."

Recent figures from the Bank of England show that overall mortgage approval numbers stand at around 60 percent lower than they did a year ago. Simultaneously, the average rate paid by new mortgage borrowers is on the up, increasing from 5.77 percent in April to 5.91 percent in June.

Halifax's house price report also commented on the likelihood of the Bank imposing further cuts in the base rate of interest, thereby making mortgage repayments cheaper. "The clear slowdown in the UK economy should curb inflationary pressures over the medium term, eventually providing the Bank with sufficient scope to lower interest rates," it said.