Nationwide announce 0.1% fall in UK house prices

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by Kay Mitchell

According to the latest house price survey from Nationwide, January saw a further decline in UK house prices with a fall of 0.1% noted. This has lowered the annual rate of house price inflation from 4.8% to 4.2%.

This is the third consecutive monthly fall in average property prices, following falls of 0.5% in December and 0.8% in November.

According to the Nationwide, the average price of a property in the UK is now £180,473.

Nationwide’s senior economist, Martin Gahbauer explained that the weakening trend in property prices over the last few months is consistent with the loosening in housing market conditions that has become increasingly evident in the data.

Mr Gahbauer continued that key indicators such as mortgage approvals and the sales-to-stock ratio have now fallen close to or even below the troughs reached in late 2004, a period that was followed by a year of very subdued price growth.

The lender expects the market to continue its freeze in the coming months following the recent trend.

Howard Archer, chief economist at Global Insight, said the figures were a clear indication of a continuing downward trend and suggested this made the intense pressure for an interest rate cut even greater.

David Stubbs of the Royal Institution of Chartered Surveyors added that these figures confirm the continuing slowdown in the UK property market. With activity weak, the market is becoming looser and tilting the balance of power away from sellers and towards buyers.

The figures come shortly after the Bank of England announced that mortgage approvals fell to a record low of 73,000 in December.