The decline in house prices is driven by a squeeze on spending power and the rapid rise in house prices in the last few years, Halifax has said as it reports a fall in asking prices during April.

House prices fell by 1.3% in April leaving prices 0.9% lower on an annual basis. Halifax said that it expects a mid single digit percentage decline in UK house prices this year. There will be regional variations, however, with some areas of the country, such as Scotland, likely to record modest price rises whilst other parts (e.g. Wales and West Midlands) are expected to see falls above the national average.

Halifax also said that the current trend of falling prices needs to be taken in context. UK prices nearly trebled (190%) over the ten years to August 2007, with the average UK price rising by more than £130,000 between August 1997 and August 2007.

Commenting, Martin Ellis, Halifax chief economist, said: “House prices fell by 1.3% in April. We expect a mid single digit percentage decline in UK house prices this year. There will be regional variations, however. Some areas of the country are likely to record modest price rises whilst other parts are expected to see falls above the national average.

Price falls should be viewed in the context of the substantial price rises over recent years. UK prices nearly doubled 190% over the ten years to August 2007. A growing economy, high employment levels, low interest rates and a shortage of new homes underpin housing valuations.”