The Halifax maintains that the weakening in house prices islargely in response to a general easing in economic growth,deteriorating employment prospects and the knock to confidencefollowing September's terrorist attacks in America.

Commenting on the figures Martin Ellis, Halifax group economist,said: 'While this was the first monthly fall in 2001, it wassmaller than the decline recorded in October last year. As aresult, the annual rate of house price inflation increased.

'House price movements over the past few months as a wholeindicate a clear downward shift in the underlying trend, withprices increasing at a somewhat slower pace compared with earlierin the year. This is consistent with reports from estate agents andhouse-builders and the latest market figures on the number ofmortgage approvals, which all show signs of a slowdown in housingmarket activity.'