House price growth continues to slow
Published On 29 November 2007
Property prices fell by the greatest amount since June 2005 during the month of November, new figures have revealed, indicating that the market is continuing to slow.Data from Nationwide showed that house prices decreased by 0.8 per cent in November, meaning that annual house price growth now stands at 6.9 per cent.
This is the first monthly fall detected by the building society's index since February 2006 and puts average UK house prices at £184,099.
"This is back in line with the softening trend we have seen in the second half of the year and is consistent with our forecast of house price growth of five to eight per cent in 2007," said Nationwide's chief economist Fionnuala Earley.
She added that "poor affordability, weaker house price growth expectations and the effect of earlier increases in interest rates" have contributed to the fall, which is expected to continue into next year.
Simon Rubinsohn, chief economist for the Royal Institute of Chartered Surveyors, said that he still expected the effects of the recent credit crunch to manifest in reduced activity, rather than "meaningful" price decreases.
"Today's data will strengthen the hand of the doves of the MPC ahead of next week's meeting and could just swing the balance in favour of an early cut in interest rates," he added.
