* Biggest annual fall in house prices since Oct. 2009
* Halifax expects 2 pct house price fall in 2011
* Lack of supply seen capping decline
(Adds details, comment)
By Fiona Shaikh
LONDON, March 4 British house prices fell at
their fastest annual rate in more than a year in February, and
worries about Britain's recovery are likely to keep prices under
pressure, mortgage lender Halifax said on Friday.
Halifax said house prices fell 0.9 percent in February, more
than offsetting a rise of 0.8 percent in January. Prices fell
2.8 percent in the three months to February compared with a year
ago -- the fastest annual pace since October 2009.
February's monthly drop was twice as big as forecast by
analysts, and contrasts with a survey from rival lender
Nationwide earlier this week, which showed house prices rose 0.3
percent on the month. [ID:nSLASDE7QD]
Halifax said it expects house prices in 2011 as a whole to
fall by around 2 percent, as uncertainty about the economic
outlook weighs on housing demand.
Most economists reckon house prices will dip this year as
tight credit conditions and a weak economic recovery deter
"It is clear that critical to the development of house
prices over the coming months will be the amount of houses
coming on to the market, mortgage availability, how well the
economy and jobs hold up as the fiscal squeeze increasingly
kicks in, and what happens with interest rates," said Howard
Archer, economist at IHS Global Insight.
Official data earlier this week showed mortgage approvals
are running at just half their long run average, implying that
house prices have limited room for growth.
But uncertainty about the housing market is also
discouraging people from putting their homes up for sale, which
should prevent a sharp downturn in prices, Halifax said.
"Fewer properties have been coming onto the market in recent
months," said Halifax economist Martin Ellis.
"This trend, if sustained, should improve the balance
between demand and supply and help to prevent a more significant
fall in house prices."
The average price of a home stood at 162,657 pounds last
month on the Halifax measure.
(Reporting by Fiona Shaikh; Editing by Ruth Pitchford)