Home prices in the U.K. dropped at the fastest rate in 16 months during February and erased a gain posted in the previous month, renewing questions about the depth of the economic recovery, according to The Daily Telegraph. On Friday, Halifax reported that home prices dropped 0.9% in February from January to an average of £162,657, more than reversing the 0.8% monthly gain posted to open 2011. The decrease brought the year-over-year decline to 2.8%, which is the largest such fall since October 2009.
Halifax housing economist Martin Ellis noted that there has been “little change” in home prices so far this year, and the group retained its forecast for a 2% drop in house prices in 2011. The data contradicts figures from Nationwide, which showed a 0.3% gain last month and a 0.1% fall in home prices in January. The Bank of England’s three-month blended reading for the two groups’ pricing data showed a 1.1% fall, undermining increased pressure on policymakers to raise interest rates on high inflation and a strengthening recovery.