House prices in the U.K. declined for a third consecutive month in September and is expected to remain broadly stable over the rest of the year and into 2013, a survey by Lloyds Banking Group's Halifax division showed Thursday.
The house price index declined unexpectedly by 0.4 percent in September from a month ago. This was the third consecutive monthly fall.
These declines have more than offset the two successive rises in May and June. Economists had forecast no change in prices after a 0.5 percent drop in August.
Average price of a dwelling in September was GBP 159,486. Prices in the three months to September were 0.5 percent lower than in the preceding three months. This compares with a 0.3 percent decline in August.
In the three months to September, prices fell 1.2 percent compared to the same period last year. Economists had forecast a 0.9 percent drop.
"Overall, there has been very little change in the average UK house price so far this year," said housing economist Martin Ellis.
The economist noted that there was, nonetheless, evidence of a slight deterioration in the trend recently with prices in the three months to September 0.5 percent lower than in the previous quarter.
Ellis noted that the generally weak economic climate remains a significant constraint on housing demand, though the relatively low level of mortgage payments in relation to income continued to support house prices.
"We expect house prices to be broadly unchanged over the rest of this year and into 2013," the economist said.
Housing activity remained subdued, but was stable, Halifax said quoting HMRC. Home sales remained "very stable" at between 75,000 and 77,000 per month between May and August. Sales in the three months to August were 3 percent higher than in the same period last year.
Rightmove said last month that the house price index fell for a third straight month in September. According to the property website, prices fell 0.6 percent in September after a 2.4 percent drop in August.
The Bank of England is due to deliver its interest rate decision today at 7.00 am ET. The bank is widely expected to maintain its quantitative easing programme at the current GBP 375 billion and leave the Bank Rate unchanged at 0.50 percent.
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