Friday, 29 February 2008

UK Home Prices Fall For 4th Consecutive Month

UK House prices fell -0.5% in February after a -0.3% decline in January. That makes 4 consecutive monthly declines in UK home prices. A trend not seen for 8 years when home prices fell for the 4 months from May 2000 - August 2000. From Nationwide:

House price inflation falls to 2.7% in February

• House prices fell by 0.5% in February, the fourth consecutive monthly decline
• The annual rate of house price inflation fell from 4.2% to 2.7%
• UK recession “a remote risk for the UK economy”

Commenting on the figures Fionnuala Earley, Nationwide's Chief Economist, said:

"The price of a typical house fell by 0.5% during February, bringing the annual rate of house price growth down to 2.7%. This is the fourth consecutive monthly fall in house prices and brings the annual rate of house price inflation to its lowest since November 2005. The trend in prices is clearly weakening, but the size of the drop in the annual rate between January and February perhaps overstates the rate of cooling as it partly reflects the particularly strong increase in prices in February last year. The 3-month on 3-month rate of price growth rate fell to -1% in February, down from -0.4% the previous month. The average price of a typical property now stands at £179,358, an increase of £4,653, or £12.75 per day, over the last 12 months.

The trend is not your friend for UK Homeowners. Expect year over price changes to move into negative territory for the first time in more than a decade by mid-year if not before.