House prices slump by 14.6%

Published 30th Oct 2008

House prices have slumped by 14.6% since last October after 12 consecutive months of falls, Nationwide Building Society said today.

Figures from the UK's largest society show the average price of a home in the UK has fallen to £158,872 - almost £30,000 less than a year ago. Prices have been driven down by falling sales volumes.

Although the monthly fall of 1.4% was slightly lower than in September, when prices dropped by 1.5%, the annual rate of decline has increased from 12.4% last month and is the largest drop ever recorded by Nationwide.

The figures are in sharp contrast with October last year when Nationwide last reported a monthly price rise. At that point annual price growth was running at 9.7% and the impact of the credit crunch was only starting to be felt by would-be buyers. Mortgage approvals were also running in line with their long-term average and 40% of first-time buyers were borrowing more than 90% of their home's value.

Now lenders have pulled back from offering large loans and withdrawn many of their most competitive deals, and housing activity has plummeted.

Nationwide said the number of completed house purchase transactions as a proportion of the total stock of mortgages was now at its lowest ever level since records began in 1974.


Nationwide's figures will make grim reading for borrowers who bought properties at the peak of the market last summer. Earlier this week the Bank of England said around 500,000 homeowners held mortgages that were bigger than the value of their property and that a further 15% fall in prices could result in 1.2 million borrowers facing negative equity.

Source: ' guardian '

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