Annual house price decline hits 16.6%

| January 29, 2009 | 0 Comments
Annual house price decline hits 16.6%

Nationwide’s latest house price survey offers little cheer to homeowners.

According to the building society, house prices continued to fall in January, dropping 1.3% on a month earlier and shaving £2,500 off the value of the average home.

The decline was slightly less than December’s, when Nationwide recorded a slide of 2.5%.

The annual rate of fall now stands at 16.6% compared with 15.9% in December, putting the average cost of a home at £150,501.

However, the three-month on three-month rate of decline improved for the fourth month in a row, to 4% at the end of January, compared with a fall of 4.2% during the previous three-month period.

The lender calculates that the average homeowner has lost £35,543 since October 2007 and its senior economist, Martin Gahbauer, explains that “the deepening economic recession and financial market turbulence continued to weigh on housing market sentiment and activity” in January.

He adds that while there may be curiosity about what is currently available in the market “many are likely to be hesitant to commit in a recessionary environment of rising unemployment “.

In Mr Gahbauer’s estimation, the UK housing market is unlikely to improve until the economy has stopped shrinking as continued restrictions of credit reduce the number of people taking out mortgages.

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