Nationwide House Prices post first annual fall in 12 years
30 April 2008
UK house prices fell for a sixth consecutive month in April according to the Nationwide Building Society on Wednesday, with prices posting their first annual fall in 12 years. The price of an average UK home fell 1.1%m/m, more than twice the rate of expectations, dragging the annual rate of change to -1.0%.
Nationwide said it was the first year-on-year fall in prices since March 1996. The index confirms similar trends to that of other rival house price indicators, pointing to a quickening downturn in the UK housing market after prices nearly trebled in the last 10 years. April’s fall reflects the consequence of not only slowing demand for housing due to decreased affordability, but also the effects of tighter credit conditions leading to markedly fewer and more expensive mortgages being available.
The news followed on from Tuesday’s Bank of England mortgage approvals falling to their lowest level since comparable record began in 1993. Approvals dropped to 64,000 from a downwardly revised 72,000. Despite the Bank of England having cut the base rate three times in the past five months to 5.00%, the mortgage rates faced by households have actually risen by around 1.25%.