House prices down again

Another survey has shown a fall in house prices, suggesting that the end may not yet be in sight for the housing market decline.

Nationwide's figures for January showed a fall in prices during the month of 0.1 per cent, bringing the annual rate of house price inflation down from 4.8 per cent in December to 4.2 per cent, the lowest rate recorded since December 2005.

Commenting on the figures, Nationwide senior economist Martin Gahbauer said: "This undoubtedly signals a continued cooling in annual house price inflation during the months ahead."

Global Insight senior economist Howard Archer commented: "It is clear that the housing market has started 2008 as it finished 2007", adding that the situation would increase the pressure for an interest rate cut by the Bank of England.

The fall in house values may persuade some to take the self build option, as the alternative may lead to them buying a house whose value then dips below the amount paid for it.


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