Nationwide Report House Price Falls For Third Month

The latest property price figures from Nationwide show a third month of falls, and the annual rate of house price inflation has fallen to its lowest level for more than two years.

Nationwide’s figures showed a 0.1% drop for the month in January, but this was less than the 0.4% drop in December, and also lower than forecasts from analysts for a fall of 0.3%.

However, the fall mean that the annual rate of house price inflation fell to 4.2% from 4.8% in December, and this was its lowest point since December 2005. The average house price is now down to £180,473 from £182,080 in December.

The three months to January showed a house price drop of 0.3%, compared with a 0.9% increase for the three months to December.

Senior Economist at Nationwide, Martin Gahbauer, commented: “The weakening trend in house prices during the last three months is consistent with the loosening in housing market conditions that has become increasingly evident in the data.”

The housing market is well and truly on a slowdown, as the Nationwide figures came on the back of figures from the Land Registry for December which showed a 0.4% fall, with seven out of ten regions seeing decreases in house prices.

The expectations that the Bank of England will cut interest rates next week will now increase with continuing evidence of a stagnating housing market. Most analysts expect the rate to be cut to 5.25%.

Other evidence of the cooling market came last week when mortgage approvals were reported by the Bank of England to be weaker than expected, posting their lowest reading since the current series began in 1999.

“This undoubtedly signals a continued cooling in annual house price inflation during the months ahead,” Gahbauer said.

Only the Halifax index has shown any increase in house prices recently, with an unexpected rise for December’s figures.