House Price Drop

House prices have fallen in the past year at their fastest rate since 1993, according to Britain's biggest mortgage lender.

Halifax said on an annual basis, house prices have now fallen by 3.8% since May last year.

It reported the cost of a home fell by 2.4% during May to stand at an average of £184,111.

With prices falling in four of the past five months, the average home now costs 6.8% less than it did in January, while property values are 9.4% lower than at their peak in August last year.

Martin Ellis, Halifax chief economist, said: "The decline in prices is caused by the difficulties created for potential house purchasers by the rapid rise in house prices in the last few years, a squeeze on spending power and the reduction in credit availability. These factors have curbed housing demand."

But the group said with the cost of a home soaring by 79% during the five years to August 2007, the price falls needed to be seen in context.

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