Halifax House Price Index October 2008

The UK average price was £168,031, the same level as October 2005 and prices were 13.7% lower than the year before.

House price to earnings ratio – a key affordability measure - has fallen by 16% from a peak of 5.84 in July 2007 to 4.92 in August 2008.

Despite recent falls, the UK average house price is still 22% higher than five years ago.

Housing market activity shows signs of stabilising with the number of mortgages approved to finance a house purchase broadly unchanged in September for a third successive month, at a seasonally adjusted 33,000 compared to 32,000 in August.  Approvals in 2008 Quarter 3, however, were 25% lower than in 2008 Quarter 2.

Martin Ellis, chief economist, said: "Housing market conditions remain challenging in the face of the significant pressures on householders' incomes and the reduction in the availability of mortgage finance since last summer.

But housing affordability is improving significantly. The house price to average earnings ratio has fallen below 5.0 for the first time for four and a half years.  We expect a further improvement in the ratio over the coming months."