Nationwide house price index down 15.9%

The latest house price figures from the Nationwide show the average cost of a UK home falling by an annual 15.9%, in December.

During the month values took another 2.5% dip, taking the average cost of a property down to £153,048, or £29,000 less than a year earlier.

According to the building society’s index, prices have now fallen for 14 consecutive months and are 18% below the market peak, in October 2007.

By comparison, Halifax figures published last week show the average cost of a UK home sliding a further 2.2% in December, taking the annual decline to 16.2% and the average price of a property to £159,896.

All areas of the UK saw prices fall in 2008, with Northern Ireland registering the most dramatic decline at 34.2% and homes in Scotland losing only 8.1% of their value.

Nationwide’s chief economist, Fionnuala Earley, describes 2008 as a year of turmoil and admits that the worsening of the disruption in the financial markets meant the building society did not anticipate the speed of house price falls or the extent of the global and domestic economic slowdown.

House sales are now 60% down year-on-year and the Bank of England recently reported that mortgage approvals for house purchases fell to a mere 27,000 in November.

The record low represents a 67.1% decline on similar approvals for November 2007.

Ms Earley is predicting that prices will fall further before significant numbers of buyers return to the market and that the economy and the labour market will need to stabilise.

Both Nationwide and Halifax have opted out of making official house price forecasts for 2009 but other commentators are predicting a further slide of between 10% and 15%.

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