Record 18% fall in house prices for year

Posted under General by Michael

According to the UK’s largest building society, Nationwide, house prices fell by 17.6% since February 2008, while the drop was 1.8% in February 2009. The mortgage lender informed that average cost of home now stands at £147,746 and predicted that the UK housing market would still be falling down.

The annual fall of 17.6% to £31,312 is a record dip since 1952. The Nationwide survey is projecting a gloomy picture for short-term.

According to reports from housebuilders and estate agents, there is slight increase in new buyer inquiries in recent weeks due to fall in prices and cuts in interest rates. But it did not contribute in affecting prices for better.

According to Nationwide’s chief economist Fionnuala Earley, interest cuts did help in  loan affordability but not boosted housing market confidence sufficiently to accelerate new transactions or slow down pace of price fall.

The pick-up in new buyer inquiries, giving hope of increased interest in housing, has not filtered into sales, but it does indicate that interest rate cuts and falling prices have raised curiosity which could kick-start buying activity once confidence is restored.

Nationwide is predicting that bank of England’s Monetary Policy Committee will cut base rate further to below 1%.

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