Halifax: House prices remain unchanged

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Halifax: House prices remain unchanged

House prices remained unchanged in January after falling for the previous three months, according to the Halifax House Price Index.

House prices last month were 4.5 per cent higher than this time last year, with the average price of a UK home increasing over the year by £7,628 to £197,244.

Halifax noted that there are continuing signs of weakness in housing market activity, including a significant drop in the number of mortgage approvals to fund house purchase in the final three months of 2007.

However, it predicts that "sound economic fundamentals" will support house prices in 2008 and they will remain flat.

The UK economy continues to grow, recording its 62nd successive quarter of GDP growth in the fourth quarter of 2007, extending the longest running period of unbroken growth on record.

Howard Archer, chief UK and European economist at Global Insight, says that although house prices did not "plunge through the floor" in January, "the housing market is clearly buckling under substantial pressure from increased affordability constraints and tightening lending practices".

He suggests that the fact that house prices did not drop in January "reinforces belief" that the Bank of England will limit a widely expected interest rate cut on Thursday from 5.50 per cent to 5.25 per cent.
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