Nationwide say house prices fall 10.5% in a year
August 28, 2008
According to the latest survey from the Nationwide UK house prices have seen the first double digit fall in annual prices for the first time since 1990.
House prices were 10.5% lower in August than they were the same time last year. Prices fell by 1.9% in August compared with July.
The average home in the UK now costs £164,654. This is £19,000 cheaper than the average price one year ago.
Nationwide says the downturn in the building industry means the market is likely to remain subdued.
The survey found that house prices have been falling for 10 months in a row and are at the lowest since early 2006.
Some estate agents data has suggested “there may be some glimmers of interest returning to the market” as some buyers were taking advantage of lower prices, said Nationwide’s chief economist Fionnuala Earley.
However, she said that an “increased supply of properties on agents’ books will continue to act as a dampener to house price growth in the short term”.
The report also said that house builders were blaming lack of consumer confidence for the continued slowdown.
Ms Earley added that the lack of mortgages available was still affecting the number of houses being sold.
“There is clearly less mortgage borrowing taking place in the current market, but those borrowers choosing a new loan are tending to opt for fixed rate loans, even though they have been more expensive than trackers”.
Figures from the Council of Mortgage Lenders (CML) released earlier this month suggested that the slump in the mortgage lending continued in July.
Total lending was up by 5% from June at £24.8bn. This was still 27% lower than a year ago.
First time buyers, who could possibly benefit from falling house prices, are struggling to obtain mortgage deals without a large deposit.
Ms Earley said that prices were likely to keep falling this year as there is still a lot of uncertainty in the market.
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