UK house prices have fallen for a second consecutive month for the first time since 2005.

Figures from Halifax show that house prices fell by 0.5 per cent last month after a 0.6 per cent decline in September.

The last time house prices slipped two months in a row was in April and May 2005.

The rate of mortgage approvals also fell, declining by 6 per cent compared with September and by 11 per cent on the third quarter last year.

The Halifax figures released today also point to a slowdown in annual house price inflation, with the yearly rate to October declining to 8.9 per cent, from 10.7 per cent in September and a peak of 11.4 per cent in August.

It is the first time inflation has fallen to a single digit since February this year when the annual rate hit 9.9 per cent. The last time inflation fell below 8.9 per cent was in October last year when it reached 8.6 per cent.

The data suggest that the five increases in the UK interest rate since August last year are beginning to have an impact on house prices.

The Bank will announce whether the MPC has elected to cut or hold the rate at midday today.

The Times MPC voted 6-3 in favour of the Bank holding interest rates at 5.75 per cent.

But three of The Times MPC elected for a reduction to the UK borrowing cost to protect the weakening economy against the tightening lending environment.

At the beginning of the month, the US Federal Reserve cut the American interest rate for the second time in two months to shore up its economy against the worsening housing market.

Halifax said today that although other areas of the economy remained strong with GDP up 3.3 per cent in the third quarter and employment at a record high of 29.1 million, it did not necessarily mean that house prices would rise again.

It said: "A mixed pattern of monthly rises and falls is a typical feature of a more subdued housing market.

"It is not unusual to see successive monthly falls in these circumstances."

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