U.K. Housing Prices Fall in September

House prices in Britain unexpectedly fell for the first time since December last month, according to HBOS Plc's Halifax house price survey on Thursday, in a firm sign that the housing market is coming off the boil.

Halifax said house prices fell 0.6%, down from a downwardly revised 0.3% gain in August and well below forecasts for a 0.4% increase.

That took the annual three-month rate of house price inflation to 10.7%, below expectations for a 11.1% rise, and the average house price to 198,500 pounds ($402,800).

"September's price fall is consistent with the normal behaviour of the market during a slowdown. A mixed pattern of monthly price rises and falls is a typical feature of a more subdued housing market," said Martin Ellis, Halifax chief economist.

Halifax said the annual rate should decline further in the coming months but noted the British economy looked strong.

However, falling house prices raise concerns over the outlook for consumer spending, especially as a global lending squeeze grips financial markets and fuels fears of a broad economic slowdown.

"Since house prices gains have stalled, we believe it is highly likely that spending growth will also hit the wall in the months ahead," said Alan Clarke, an economist at BNP Paribas.