HOUSE prices in the United Kingdom fell for a fourth month in September as the global credit crisis intensified, locking out home buyers and forcing the sale of the country's biggest mortgage lender, a report by Rightmove showed, Bloomberg News reported.
"The housing market is on its knees and will remain so until financial institutions address the disastrous state of the mortgage funding markets," said Miles Shipside, commercial director at Rightmove. "While this market provides a good opportunity to trade up, it requires a degree of bravery."
The average asking price for a home fell 1 percent from August to 227,438 pounds (US$418,443), the property Website said. From a year earlier, prices fell 3.3 percent, Bloomberg News said.
HBOS agreed to a takeover by Lloyds TSB after plunging home values and the financial market crisis destroyed the value of the company and added to the threat of a recession.
Prices dropped the most in the East Midlands, where they fell 5.3 percent in the month, and values declined 3.9 percent in the southwest, Rightmove said. In London, house prices rose 4 percent in the month after a 5.3-percent drop in August.
Lenders are reeling from higher borrowing costs in interbank lending on concern over losses stemming from the collapse of the United States housing market.
The US Treasury last week announced a US$700-billion plan to buy troubled assets and avert a financial meltdown.
The pound rose against the dollar yesterday, trading at US$1.8439 in London. The currency has fallen 7 percent since the beginning of August.
The UK economy entered a recession in July, forecasts by the Confederation of British Industry, the country's largest business lobby, show. Growth stalled in the second quarter, ending the longest period of uninterrupted economic expansion in more than a century.
Prime Minister Gordon Brown suspended the tax on home purchases of less than 175,000 pounds this month.
Still, the number of new listings per estate agent fell to a record low, Rightmove said.
"The changes in stamp duty are just tinkering at the edge of the system," Shipside said.
Derivatives prices suggest commercial property values will continue to fall until 2010 as concerns about the UK economy blunt demand, the Bank of England said in its quarterly bulletin yesterday.
Other residential housing data also show the slump has deepened.
Home sales plunged to a 30-year record low in August, the Royal Institution of Chartered Surveyors said on September 9. Prices fell by the most in a quarter century, HBOS said on September 4.
Bank of England policy makers said they are still concerned about the fastest inflation in a decade, making them even more reluctant to lower interest rates.