Nationwide announces 8.1% annual decline in house prices

| July 31, 2008
Nationwide announces 8.1% annual decline in house prices

Nationwide has reported that house prices have fallen by 8.1% in the past year.

The UK’s largest building society says that values are declining at their sharpest rate since its records began, in 1991, with July showing a 1.7% fall, following a loss of 0.8% in June.

Based on these figures, the average cost of a home has fallen to £169,316 which is nearly £15,000 less than a year ago.

However, Nationwide’s chief economist, Fionnuala Earley, points out that while house prices have now been falling for nine consecutive months, the average home still costs almost £11,000 more than it did in July 2005.

At this point it is worth reflecting on the Land Registry’s figures for June, which were published earlier this week.

The figures may not be the most recent but do provide an accurate record of the direction of UK house prices because they are based on completed transactions.

According to the government body, house prices in England and Wales fell by 1% in June, from May.

The average price of a home in England and Wales stood at £180,781 and the decline took the annual rate of house price inflation to 0.1%.

To further confuse the picture, credit rating agency Standard & Poor’s has published a report predicting that one in seven British homeowners could be in negative equity in the coming year, as house prices slide a further 17%.

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