UK house prices fall for first time since May 2005

According to Halifax's House Price Index, house prices decreased by 0.4% in January, representing the first decrease since May of last year.

On an annual basis, house price inflation is unchanged from last month at 5.1%, and significantly below the 13.7% annual growth rate recorded in January 2005.

The research also shows that the number of first time buyers, at an estimated 320,000 in 2005, was 10% lower than in 2004 and 40% lower than in 2002, putting it at its lowest level since 1980.

Halifax went onto say that it expected the market to be flat in 2006 with modest nominal house price growth and no change in real terms. UK house prices are forecast to rise by 3% in 2006, broadly in line with the predicted rise in retail price inflation.