UK House Prices Situation: Average prices falling nationally

UK House Prices Forecast: At least 5% fall by the end of 2008

First Annual Fall since 1996 - Nationwide

The UK's largest building society, Nationwide, has announced that house prices have fallen year-on-year for the first time since March 1996.

April saw the price of an average home fall by 1.1% from March, bringing the annual level of house price inflation down to -1.0%.

Commenting on the figures, Nationwide Chief Economist Fionnuala Earley said that "April’s fall in prices continues the trend of the last six months and reflects the weakening sentiment in the market brought about by poor affordability and tighter financial market conditions."

Earley went on to say that the "steep decline in purchase transactions over the last half year" has resulted in stocks of unsold houses rising, putting buyers in a much stronger bargaining position. "Higher mortgage rates and tighter lending criteria" have also led to mortgage approvals falling to "record lows", she said.

Halifax Confirms Falling Prices - Down 1.3% in April

The latest Halifax House Price Survey, published on the 2nd May, confirms that house prices are falling in the UK.

The Halifax figures show that average house prices fell by 1.3% in April, bringing the annual rate of change down to -0.9%.

Martin Ellis, Chief Economist at the Halifax, commented that the bank now expects "mid single digit percentage decline in UK house prices this year." Ellis noted that there would be some regional variations, with areas such as Wales and the West Midlands likely to see "falls above the national average", while Scotland might escape price falls altogether.

Ellis also noted that falling house prices are being driven not just by lending restrictions but by a growing squeeze on incomes - with average earnings rising by just 3.7% in the year to February, "below the 4.1% increase in the headline rate of inflation in the same period." In other words, people are earning less in real terms, hence the need for a downwards adjustment to house prices.

Read our take on the Credit Crisis the effect on UK House Prices and Mortgages. A Special Report

.

Browse over 200 Free Mortgage Tips

Your Complete Guide to UK Mortgages

Find Out How to Win the Race to Buy Your Home - Home Buyers Guide

How to Sell Your Home

Learn How to Save ££s by Remortgaging

Read the Insider Info on Home Insurance

Best Buy UK Mortgage Tables

UK Mortgage Calculators

UK Mortgage Quotes

First Time Buyers

Self Employed Mortgages

Bad Credit Mortgages

Overseas Mortgages

Common Questions / FAQs

Mortgage Definitions

Mortgage Lenders UK List

LATEST MORTAGE UK NEWS

Site Help

About Us

Your Privacy

Contact Us

HELP

Mortgage Guide Site Map

Tip Our Charity