House prices declined by 2.3% in February says Halifax, which more than offset the increase it reported in January of 2%, whilst the three-month-on-three month figures show a fall of 3.6% overall. This is slightly below the average rate of decline since June 2008, the report states, as a measure of the rate of drop over the past year and a half.

These latest figures bring the annual rate of change to -17.7%, with the average UK house price close to that in August 2004 of £159,799.

Martin Ellis, housing economist said: ‘Whilst market activity remains at very low levels, there are some tentative signs that activity may be beginning to stabilise. The house price to earnings ratio – a key measure of housing affordability – has fallen to its lowest level for six years.

‘Continuing pressures on incomes, rising unemployment and the negative impact of the dislocation of the financial market on the availability of mortgage finance are, however, likely to mean that 2009 will be another difficult year for the housing market.’

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