UK house prices fall 0.3 pct in Feb – Land Registry

Monthly house prices in England and Wales fell in February for the first time since April last year, the Land Registry said on Friday.

The price of the average home dropped by 0.3 percent to 164,455 pounds ($244,000), partly reversing January's 2.1 percent increase. Year-on-year prices rose 7.0 percent, faster than the 5.2 percent rise recorded in January.

This is the fourth consecutive month in which there has been an annual rise in house prices on the Land Registry's measure, which tends to lag changes in surveys from lenders because it is based on completed sales.

Mortgage lenders Halifax and Nationwide both reported the first price falls for eight or nine months in February, and economists said the modest rebound in house prices may be levelling off.

Since hitting a five-year low in early 2009, house prices have bounced around 10 percent, helped by a shortage of supply and low mortgage rates for those buyers able to find large deposits for their purchases.

"We suspect that house prices will be erratic and prone to corrections in 2010, and will probably be no better than flat over the year," said Howard Archer, UK economist for IHS Global Insight.

"The overall appreciable house prices rises that have been seen since early 2009 have been out of kilter with … economic fundamentals," he added, noting that house prices had been rising much faster than earnings.

Finance minister Alistair Darling announced a two-year moratorium on property purchase taxes for first-time buyers of property costing up to 250,000 pounds in his Budget on Wednesday — something likely to provide short-term support for prices.

However, it will be of little benefit in London, where the Land Registry reported average house prices of 333,394 pounds and a 0.5 percent fall in February.

Prices also fell in Wales, southeastern and northeastern England and in the East Midlands, were unchanged in eastern England, and rose elsewhere.