Annual house price growth turns red

The average price of a UK home is now lower than it was 12 months ago, Nationwide has said.

Issuing its latest house price index, the building society said that April's 1.1 per cent reduction in house prices had finally succeeded in dragging annual growth into the red.

April's reduction marked the sixth monthly fall in house prices, silencing the few remaining pundits who had maintained that the market was heading for a rapid rebound.

Nationwide said the average property in the UK now costs £178,555, down from £179,110 in March.

"April's fall in prices continues the trend of the last six months and reflects the weakening sentiment in the market brought about by poor affordability and tighter financial market conditions," commented Fionnuala Earley, Nationwide's chief economist.

She added: "The latest fall in house prices follows from the steep decline in house purchase transactions over the last half year."

The Bank of England yesterday reported that mortgage approvals have fallen to their lowest level since 1993, with many first-time buyers now finding it almost impossible to get on the housing ladder.

News posted on 30th April, 2008