House prices still falling, says Halifax
House prices in the UK are dropping gently, according to figures from major mortgage lender Halifax.
Its latest monthly survey shows that prices fell by 0.7% in October, to an average of £158,426.
This left house prices 1.7% lower than they were a year ago.
The lender's housing economist, Martin Ellis, said most of that annual drop had taken place in the past few months and reflected the poor state of the economy this year.
"Signs of a modest deterioration in the trend in house prices continued in October," he said.
"Prices in the three months to October were 1.2% lower than in the preceding three months. This was the fifth successive decline in this measure of the underlying trend.
"Recent encouraging developments relating to the level of overall economic activity and conditions in the labour market, however, may help to support demand and underpin house prices around current levels over the coming months," he added.
Meanwhile, the Co-operative bank is using money which it has borrowed from the Bank of England under its Funding for Lending scheme (FLS), to make cheaper mortgages available to people with only 10% deposits.
It is now offering such borrowers a two-year fixed rate deal at an annual interest rate of 3.99%, and without the borrower having to pay any arrangement fee.
The Co-op's current mortgage range already has five fixed-rate deals, for people with only a 10% deposit.
But they are more expensive than the new one, ranging from a rate of 4.7% for a two-year deal to a rate of 5.1% for someone arranging a five-year deal.
A spokeswoman for the bank declined to reveal how much FLS money would be made available at cheap rates, or how many mortgages the bank hoped to arrange with the extra cash.
But she said that other cheap deals were in the pipeline.
"We are looking to lend a substantial amount to first-time buyers through the 3.99% rate," she said.
"Beyond that we will be using the FLS to launch further competitive mortgage rates to our customers and first-time buyers throughout the rest of 2012 and in 2013."
Playing it safe
Money from the Bank of England's scheme has been finding its way into fresh mortgage lending, but so far appears to have been heavily concentrated on cheap deals for people with very large deposits to put down, such as 25%, 30% or even 40%.
Last week, figures from Moneyfacts showed that mortgage rationing is still very much in force among UK lenders, with more than two-thirds of the mortgage deals available in the UK at the start of November requiring a deposit of at least 20%.
John Sexton of the price comparison website Moneynet.co.uk said: "The market has been awash with rate cuts and super-low-cost new deals for those fortunate enough to have a 40% plus equity stake in their property, and until now, lenders have decided to play it safe with the lower-risk element of the market.
"In late August, the cheapest 90% loan-to-value (LTV) two-year fixed rate was 4.84% with a £495 fee from Yorkshire Building Society.
"On a £120,000 mortgage [25-year term] you'd have paid £690 per month for 24 months, whereas with the substantially lower 3.99% rate, the monthly repayment falls to £632," he pointed out.
Year on year % change