House prices 'down by 2.2%' in October

According to the House price index by Halifax, house prices fell by 2.2 per cent in October.

Year on year, the value of a typical property has reduced by 13.7 per cent and now stands at £168,031.

Commenting on the results, Martin Ellis, chief economist at the bank, said that housing market conditions "remain challenging" following the reduction in the availability of mortgagefinance and pressures on householders' incomes.

However, he suggested that housing affordability is improving significantly.

"The house price to average earnings ratio has fallen below five for the first time for four and a half years. We expect a further improvement in the ratio over the coming months."

This ratio has fallen by 16 per cent from a peak of 5.84 in July of last year, the index said.

Meanwhile, yesterday the Bank of England reduced interest rates by 1.5 percentage points to three per cent, which was particularly welcome for self build borrowers with base-rate tracker mortgages.