Figures show that UK house prices continued to fall steeply during April, suggesting that talk of a recovery in the market may have been premature.
The average home in the UK lost a further 1.7% of its value during the month, according to Halifax. The annual rate at which prices are declining also accelerated to 17.7%, up from 17.5% in March and equalling February's record drop.
'The fact that the economy is in recession and unemployment is rising sharply is not a great recipe for demand," said Halifax chief economist Martin Ellis. 'There are some signs that confidence is improving a little bit but we still expect further house price falls.'
Better figures from service sector
Meanwhile, a separate report showed that activity in Britain's service sector contracted at its slowest pace since last August in April. This was helped by a marked improvement in new business and confidence in the outlook.
The CIPS/Markit services PMI activity index rose to 48.7 in April from 45.5 in March, the highest reading since August 2008 and the biggest rise in the index since April 1999. That still left it below the 50-mark that separates expansion from contraction but was well above analysts' forecasts.
All the sub-indices rose last month, with that for new business jumping 4.1 points to 48.2, the biggest rise since March 1999 and the highest reading since April 2008, when it was last above 50. Nearly half of companies surveyed said they expected activity to increase in a year's time, taking the business expectations index to its highest since last May.
The service sector accounts for around three-quarters of Britain's economic output and today's survey adds to anecdotal evidence that suggests the economy may be nearing a bottom after shrinking by 1.9% in early 2009.
But the weak sterling continued to drive up firms' input costs, although weak demand and strong competition meant companies remained under pressure to cut their prices.
