In the three months to November prices were 2.1% lower than in the preceding three months.
The figures show the rate of decline in prices on the three month-on-three month measure has picked up over the past few months, but it remains well below the declines of 5-6% in the second half of 2008.
Martin Ellis, housing economist at the Halifax, says: “The highly mixed picture of monthly house price rises and falls recorded this year continued. Such a varied monthly pattern is consistent with a relatively flat underlying trend for house prices.
“Higher numbers of properties for sale, combined with reduced demand, have caused the recent decrease in prices.
“There are, however, some tentative signs that homeowners are becoming more reluctant to put their properties on the market which, if continued, will help to relieve the current downward pressure on prices. Interest rates are likely to remain very low for an extended period, which will support the improved mortgage affordability position for homeowners.
’As a result, we do not expect to see a significant fall in house prices.”
Paul Diggle, property economist at Capital Economics, says: “The issue now is how severe and how fast further house price falls will be. Given the experience of 2009, there is a risk that short-term supply constraints will prevent prices from falling far. But it is not our central view.
“Certainly, the number of willing sellers is likely to decline. But if unemployment starts to rise again next year as we expect, the pool of unwilling sellers will increase.
“And with the labour market worsening and mortgage lending set to remain very weak, next year is also likely to see further offsetting falls in buyer demand. That should prevent a recurrence of the tight market conditions that drove prices up in 2009 and early 2010.
“Of course, low interest rates remain a support. But while that makes predicting the speed and depth of price falls difficult, we think at the very least that prices will drop back to their early 2009 lows and, in all probability, considerably further.”