House prices in the UK continued to fall in April, but at a slower pace, a report from Lloyds Banking Group Plc's Halifax division showed Wednesday.

The report revealed that house prices declined 1.7% in April, following a 1.9% fall in the previous month. Economists expected a drop of 1% in house prices. During the month, the standardized average house price moved down to GBP154,716 from GBP157,320 in the preceding month, and returned to the level seen in April five years ago, when the average price was GBP154,511.

At the same time, the annual rate of change in house prices, as measured by the average for the latest three months against the same period a year earlier, showed a 17.7% fall in April, faster than the 17.5% drop in March.

The Halifax said rising unemployment, low consumer confidence and the reduced availability of credit are all expected to exert downward pressure on the housing market over the next few months, indicating further declines in house prices.

In April, the house price to earnings ratio, an important affordability measure, dropped to 4.26, the lowest level since September 2002, when the indicator stood at 4.14. The indicator also come in lower than the peak 5.84 in July 2007, but was above the long-term average of 4.

The Bank of England or BOE said there were tentative signs of stabilization in activity level, although at a lower level. According to the BOE, the number of mortgages approved to finance house purchase, a leading indicator of completed house sales, increased a seasonally adjusted 19% year-on-year in the first quarter. In March, the approvals at 39,230 were at the highest level since May 2008, but were still 34% lower than in the same month the previous year.

In March, the monthly payments for the average mortgage borrower accounted for 22% of the average gross household income, lower than the peak 26.9% in October 2008. This was mainly due to a decrease in the average mortgage rate paid by existing borrowers to 3.83% from 5.82% in October, translating to a net fall in payments by GBP111 since then.

Earlier last week, the National building society also released house prices data for April. According to Nationwide, house prices fell 0.4% month-on-month and 15% year-on-year in April. The Halifax report has also shown similar movements in house prices.

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