House prices fall fifth consecutive month

Permalink: House prices fall fifth consecutive month
by Kay Murchie

The latest survey from the Nationwide building society shows that annual house price inflation has fallen to its lowest level since March 1996.

Nationwide said prices fell by 0.6% in March, taking the average UK house price down to £179,110 meaning that the annual rate of increase fell to just 1.1%, the lowest rate for 12 years.

According to the Nationwide, this is the fifth consecutive month that property prices have fallen and the group predict prices will fall further.

Fionnuala Earley of the Nationwide said that this was a change to its earlier forecast that there would be no overall change in prices by the end of this year. A clear change in sentiment since the late summer has led to the sharp slowing in house price growth, prices are now 1.5% lower than 3 months ago, she added.

Expectations of higher house prices will have undoubtedly encouraged some speculative demand in the housing market over the years. However, with lower house price growth expected now and in the future, the effect will work the other way, causing at least some of this demand to fall away, added Ms Earley.

Yesterday, the Nationwide announced it was increasing its interest rates on all its fixed-rate and tracker deal mortgages - its fifth since the start of the year.

The UK housing market now looks as if it will go through its biggest slowdown since the early 1990s, according to experts.