released its latest house price figures today showing the a 1.1 per cent rise over the past 12 months. However, it also revised its forecast for 2008 down from no change to an overall fall.

This will please neither estate agents nor house builders as they put Easter behind them and set themselves ready for the big seasonal sales push. But the blow to their sales teams may come next week with the release of the . There is a fair chance this may show the annual rate turn negative for the first time since January 1996. Not be good timing for an industry keen to build some sales momentum for the year.

Every sales person knows that you can spin most facts to put a pretty face on them. And as long as the annual inflation figure stays above zero that is a big selling point, as I was reminded when reading in the Sunday Telegraph last weekend.

His piece does drive home just how pyschologically important the annualised figure is. Even though house prices are lower today by about 5 per cent from the peak reached last year we can still hang on to the notion of annual growth.

However, what was rather surprising in Liam Halligan's comment was the note that "the Nationwide index of annual house price growth has fallen from 11.1 per cent to 2.7 per cent today...That's still a way above zero, and is also north of the level it reached back in early 2005..."

True on Sunday, half true today, but statistically, unless the current trend turns fast, unlikely to be true by late April. Then the annual inflation rate for homes may well be in negative territory on the Nationwide index and possibly (we shall see next week) the HBOS index is already there.

It's worth looking closely at the figures. Halifax measured the average house price this February at 拢193,448. In March last year the figure was 拢193,180. So a fall of more than 0.14 per cent this March and we are no longer above zero, we are negative. This is not unlikely given that Nationwide recorded a 0.6 per cent fall for the month.

Look then at the 拢198,206 average house price measured by Halifax for April last year. If annual house price inflation is to stay positive this April house prices will have to rise by 2.5 per cent from where they were in February.

Now that will be an ask, especially as the latest show the value of mortgages for homebuying well down on a year ago and suggest buyers are holding back.

So, it will be a surprise if annual house price inflation is not firmly in negative territory by April. This will be a big psychological weight for sales teams to bear.

The more worrying question for the construction industry is whether this will in itself slow the market further. If so, that may well drag down the house building figures.

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