House prices 'likely to fall again'
Fears over the property market have intensified after figures showed the average price of a UK property slumped more than £6,000 last month.
Experts warned there were likely to be more declines to come after September's 3.6% price fall, which was the biggest drop since Halifax first began compiling figures in 1983.
Halifax said prices were forced down by an increase in the number of properties on the market, combined with a drop in demand fuelled by uncertainty over the economy.
The fall wiped more than £6,000 off the average price of a UK house, at £162,096 last month.
The lender played down the significance of the drop, stressing it was too early to conclude that it represents the beginning of a sustained period of declining house prices.
But the figures sent shockwaves through the industry. Shares in housebuilders, such as Barratt Developments, Persimmon and Taylor Wimpey, and lenders including Lloyds Banking Group and Royal Bank of Scotland, were all down after the figures were released.
Paul Diggle, property expert at Capital Economics, said: "The hefty drop in the Halifax measure of house prices adds weight to the view that house price weakness is far from over."
While industry reports have been mixed, he said the Halifax result "adds weight to the argument that we are on the cusp of a more sustained downturn in house prices".
Tim Hammond, chief executive of property search firm The Buying Agents, said: "There will be a lot of buyers out there who will see this as the window of opportunity they have been waiting for. For some time there has been a stand-off between sellers and buyers, with vendors reluctant to drop their prices and properties languishing on the market for months at unrealistic prices."
But the Government spending review, together with renewed signs of a lending squeeze amid cash-strapped banks, casts a dark cloud over the outlook for property prices.