Nationwide: House prices fall but pace slows

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by Kay Murchie

According to the Nationwide, the fall in house prices has eased slightly after prices fell by 0.4% during the month, compared with a fall of 1.3% in October.

Despite this, the lender believes that recovery is still some way off as the deteriorating economy will continue to put pressure on the housing market.

The Nationwide said that the latest monthly fall takes the average house price to £158,442.

Meanwhile, the annual rate at which prices are falling slowed to 13.9%, against a year-on-year fall of 14.6% a month earlier.

Nationwide’s chief economist, Fionnuala Earley, explains that despite the easing in house price falls, conditions are still not favourable for a quick recovery and with prices continuing to fall, there is less incentive for new borrowers to enter the market.

The housing market also remains subdued as a result of a slump in mortgage lending. Borrowers are unable to obtain a mortgage without a significant deposit.

Earlier this week, Sir James Crosby, a former chief of HBOS, urged to Government to take the necessary steps to kick-start the flow of mortgage funds.

If such action isn’t taken, Sir James believes that mortgage lending could come to a complete standstill which will result in further falls in prices and transactions.